Beta

×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Why There Are So Few ISP Start-Ups In the U.S.

timothy posted about 4 months ago | from the cover-charge-is-so-high dept.

The Internet 223

An anonymous reader writes "Despite whispers of growing dissatisfaction among consumers, there are still very few ISP start-ups popping up in communities all over the U.S. There are two main reasons for this: up-front costs and legal obstacles. The first reason discourages anyone who doesn't have Google's investors or the local government financially supporting them from even getting a toe in the business. 'Financial analysts last year estimated that Google had to spend $84 million to build a fiber network that passed 149,000 homes in Kansas City, with the cost per home at $500 to $674.' The second reason will keep any new start-up defending itself in court against frivolous lawsuits incumbent ISP providers have been known to file to bleed the newcomers dry in legal fees. There are also ISP lobbyists working to pass laws that prevent local governments from either entering the ISP market themselves or partnering with private companies to provide ISP alternatives. Given these set-backs and growing dissatisfaction with the status quo, one has to wonder how long before the U.S. recognizes the internet as a utility and passes laws and regulations accordingly."

cancel ×

223 comments

Sorry! There are no comments related to the filter you selected.

All I can say to that is... (0)

Anonymous Coward | about 4 months ago | (#46681777)

who?

falling behind (0, Flamebait)

harvey the nerd (582806) | about 4 months ago | (#46681815)

Parts of Asia have their act together. The US is largely a 2nd world country in terms of internet access and rates.

Re:falling behind (1)

TapeCutter (624760) | about 4 months ago | (#46681861)

The invisible hand has America by the balls. It feels good, for a while...

Regulate last mile (1)

Stellian (673475) | about 4 months ago | (#46681935)

The free market will yield low competition because providing the service is a strong technical monopoly, similar to electricity, gas and water. The author proposes we treat Internet like a basic utility but this is a bad idea: the municipal internet pipe will soon become outdated, the city council will reject any improvements because "it works good enough for most citizens", a private alternative will emerge and we are back at square one.

Instead of treating internet like a utility, the preferred solution in Europe is to create a public corporation that digs the trenches and channels where fiber and equipment are placed, with equal access for all competing providers. Since the technology evolves quickly, a nimble private investor is much more efficient in upgrading the network and maintaining a competitive speed. The low tech, highly expensive trench or pole can be amortized over a few decades with a flat fee that ISPs can pass on to consumers. It works.

The issue is not choosing between the market and the state, rather we should correct market failures with keyhole solutions that restore competition without creating bureaucratic and governmental behemoths. Municipal internet is probably better than what you have now, but is still an inferior solution.

Re:Regulate last mile (2)

thaylin (555395) | about 4 months ago | (#46682031)

Strawman, the OP does not state that we have to have maniciple broadband in order to fix it, he said we need to treat it like a utility. We have utilities that are not owned by the government, namely phone and electric, which are better regulated to provide universal access. Without treating them like a utility we cannot do what even you suggest.

Re:Regulate last mile (1, Interesting)

gnupun (752725) | about 4 months ago | (#46682157)

But utilities are upgraded at a very slow pace because the govt regulates how much profit a utility company can make, putting brakes on innovation. With the internet, we want to replace/upgrade everything every 10 to 15 years and that is not possible if the internet is classified as a utility.

Utilities are fine for phone and electricity because they are mature technologies that don't change much year-to-year.

Re:Regulate last mile (3, Insightful)

plopez (54068) | about 4 months ago | (#46682231)

But companies often float bonds insured by the taxpayer, massively reducing upgrade costs. Besides profitability is no guarantee of service.

Re:Regulate last mile (1)

Anonymous Coward | about 4 months ago | (#46682267)

But utilities are upgraded at a very slow pace because the govt regulates how much profit a utility company can make, putting brakes on innovation.

This sentence seems to contradict itself. How would limiting the profit slow down upgrades or put brakes on innovation? Are you perhaps confusing "profit" with "revenue"?

Upgrading is an expense. When income exceeds all your other expenses there is a choice of how much of the remaining income to spend on upgrades and how much to keep as profits. With limits to how much may be kept for profit you are encouraging upgrades, not discouraging them.

Regarding electricity and phone, those utilities are upgraded infrequently because they are mature, not because they are utilities. There's not much reason for an Internet utility wouldn't upgrade at least as quickly as what you have now.

upgrading network would be stupid, rocking the boa (3, Insightful)

raymorris (2726007) | about 4 months ago | (#46682447)

There is no need to imagine what might happen, we've had regulated industries and we know how they work. An example you probably remember is long distance phone service. The government set the cost recovery rate at $0.40/minute USD1980 ($2 / minute in 2014 dollars).

If you want to ponder about similarly situated ISPs and their upgrade plans, imagine you are on the board. You have two choices:

a) Issue more stock to raise $80 million and risk your reputation attempting a difficult upgrade, the split get the government-mandated $10 million profit with the new stockholders.

b) do nothing and have the mandated $10 million profit all to yourself.

When your profit is set by law, the only rational course of action is to not rock the boat and spend your days on the golf course.

Re:upgrading network would be stupid, rocking the (0)

thaylin (555395) | about 4 months ago | (#46682685)

You assume the regulation does not require them to upgrade.

Re:upgrading network would be stupid, rocking the (1)

Gr8Apes (679165) | about 4 months ago | (#46682793)

You are way way off base. You left off

c) Take the excess and form the most successful R&D lab and innovation engine the world has ever known.

And, while prices didn't drop a lot, service certainly improved in leaps and bounds. We used to have party lines (shared lines where only 1 subscriber could talk at a time to an outside number, but all members of the party line could chat with each other however much they wanted. We also used to have manually operated switches, 5 digit numbers, etc etc etc. All of those were "upgraded" within the monopoly window to the systems that we still use today.

Re:upgrading network would be stupid, rocking the (1)

Hodr (219920) | about 4 months ago | (#46682897)

Not arguing your point, but you must be using a wonky inflation index to get you from $0.40 to $2.
http://data.bls.gov/cgi-bin/cp... [bls.gov]

Re:Regulate last mile (3, Insightful)

Lumpy (12016) | about 4 months ago | (#46682509)

This is a stupid comment.

They wont spend money because their profits are regulated? are you that stupid? Please explain the huge number of Windmills going up all over the place at $100,000 each. Plus all the backbone upgrades going in. Hell they recently upgraded the local COAL power plant to be a dual fuel Gas/Coal so they can run Natural gas but easily revert to coal if they need to.

Did you even do ANY googling before you made your horribly uninformed comment? Utilities are spending money on upgrades at a higher rate now than every before in history.

Re:Regulate last mile (2)

plopez (54068) | about 4 months ago | (#46682227)

We also have utilities owed by members. Rural phone and electric providers, who serve areas for profit companies cannot due to lack of profitability.

Re:Regulate last mile (0)

Anonymous Coward | about 4 months ago | (#46682721)

What we need to do is treat the ducts like a utility, not the internet access.

Re:falling behind (1, Insightful)

tmosley (996283) | about 4 months ago | (#46682515)

The invisible hand was cut off ages ago. You think the US has a free market? You're nuts, mate. The last vestiges of it disappeared decades ago. The US is full on fascist now, and is going into the same terminal decline that marks all fascist societies. Starving times are coming, just like they came to Spain.

Re:falling behind (2, Insightful)

PopeRatzo (965947) | about 4 months ago | (#46682801)

The invisible hand was cut off ages ago.

There never was such a thing to begin with. It was a fiction created by plutocrats to give moral cover for avarice. "It's not me, it's just the market!"

Attempting to create a moral framework for greed is one of mankind's oldest hobbies.

Re:falling behind (1, Informative)

QuantumLeaper (607189) | about 4 months ago | (#46681875)

1st world country means they are aligned with the US, 2nd World country they are aligned USSR(Russia), 3rd World country they are aligned with neither of them, those are the Politically definitions. Economically there companies are trying to sink the Future of the US because of greed. They would rather have a dollar today instead of 10 in the future.

Re:falling behind (0)

Anonymous Coward | about 4 months ago | (#46681945)

So this is only from the US perspective. For the rest of the world it's a 3rd world country by your definition... .the us only allignes with the us

Re:falling behind (1)

Anonymous Coward | about 4 months ago | (#46682189)

And if you want to be super-pendantic the three worlds as developed by Zhou were actually the first world as the superpowers (US and USSR), the 2nd world as the allies of the superpowers (e.g. NATO and Warsaw pact countries), and the 3rd world as the non-aligned nations.
Source [google.com]

Besides that, with the fall of communism and the revolutions in the late 80's the definitions of first world, second world, and third world have moved to those of economic prosperity. So your definitions fail to meet both the modern standard, and the historical one.

Re:falling behind (1)

Imrik (148191) | about 4 months ago | (#46682441)

Zhou's definition was predated by the GP's which developed in the 1950s. While Zhou's is the one that more closely resembles the modern world, it is not the one that people usually reference.

Re:falling behind (1)

tmosley (996283) | about 4 months ago | (#46682551)

Hate to tell you, but it is the governments and central banks who sank our future. Though the corporations are largely inseparable from them--a kind of evil trinity.

Come to think of it, that is a pretty apt analogy. The Government is the father, the corporations the son (for obvious reasons), and the Fed is the unholy ghost, because hardly anyone knows what it is or what it does.

Re:falling behind (1)

Lumpy (12016) | about 4 months ago | (#46682483)

2nd world? stop coloring it so nice. It's a freaking 3rd world as far as internet goes. these companies in the US need to be forced to do what they were paid to do with the tax dollars they were given.

Comcast, Verizon, Time warner all were given BILLIONS in tax payer dollars to build out the last mile infrastructure to people homes and they did not do it. Congress needs to demand all the money back or force them at gunpoint (Give homeland security a honest job) to do what they were paid to do.

Re:falling behind (1)

Zontar The Mindless (9002) | about 4 months ago | (#46682763)

Parts of Eurasia have their act together. The US is largely a 2nd world country in terms of internet access and rates.

TFTFY. On behalf of those of us who live in "Asia" west of the Urals.

Ah, Crony-Capitalism! (4, Interesting)

BlueStrat (756137) | about 4 months ago | (#46681915)

Where government creates regulations and laws to favor "connected" businesses and interests. That's how the established ISPs have come to have so much power.

."..one has to wonder how long before the U.S. recognizes the internet as a utility and passes laws and regulations accordingly."

Now the author of TFS thinks *more* laws & regulations from the *same* crooks that have intentionally worked long and hard to *create* this situation are suddenly going to help!?

If there's enough crap stirred up to occupy the news cycle for more than a day or two, they'll do what they always do. Put together some Bill with a great-sounding name and at a quick glance looks good, but there will be sub-clauses and sub-paragraphs buried deep in the weeds of the Bill that actually make things *worse*.

Hmm, on second thought, where did I put that property title to that bridge? I may have found a prospect!

Strat

Re:Ah, Crony-Capitalism! (0)

Anonymous Coward | about 4 months ago | (#46681929)

Now the author of TFS thinks *more* laws & regulations from the *same* crooks that have intentionally worked long and hard to *create* this situation are suddenly going to help!?

You don't need more laws, you just need to enforce the current ones.
If a company is abusing its monopoly, break it up.
Also, don't split them regionally, that isn't going to help. Split them so that they become multiple actors in the same region.

Re:Ah, Crony-Capitalism! (0)

Anonymous Coward | about 4 months ago | (#46682007)

Nice in theory, but companies have a well-established playbook for getting around anti-monopoly rules. Vertical integration, so that any new business that isn't vertically integrated is immediately at a huge competitive disadvantage. Various forms of vendor lock-in making it inconvenient for people to switch to another provider. Multiple "competing" companies owned by the same parent company.

Re:Ah, Crony-Capitalism! (2, Insightful)

Anonymous Coward | about 4 months ago | (#46682037)

Nice in theory, but companies have a well-established playbook for getting around anti-monopoly rules. Vertical integration, so that any new business that isn't vertically integrated is immediately at a huge competitive disadvantage. Various forms of vendor lock-in making it inconvenient for people to switch to another provider. Multiple "competing" companies owned by the same parent company.

It is nice in both theory and practice, if enforced.
Just look at EU, it isn't like the large companies doesn't already try to work around the rules and regulations. The solution is to say "I don't give a shit about you trying to avoid the laws. Here, have another fine until you have fixed the problem."
This doesn't happen in the US because the government is working for the large companies and have no intention of fixing the problems.

Re:Ah, Crony-Capitalism! (2, Informative)

Anonymous Coward | about 4 months ago | (#46682185)

I live in the EU (UK) and I don't see things working any better here.

The UK energy market is dominated by a small number of highly vertically-integrated suppliers (the same company generates, wholesales, distributes, and retails), who pretty much have a license to print money - they don't really compete with each other, one of them raises prices, and a few months later the rest al follow suit. Apart from some vigorous hand-waving, the regulator can't do jack about it. Sure, governments keep threatening to do something about it, but the energy companies just play the investment card, they say if the government interferes with them, they won't invest in the energy infrastructure, and a few years down the line we'll be having blackouts. The government ends up doing nothing.

As far as ISPs are concerned, the three largest are BT (former national monopoly telco), Virgin (the only cable provider in the UK) and PlusNet (owned by BT). BT and Virgin are vertically integrated (they own everything from the backbone to the cables under the streets to the end-user equipment). Most other ISPs are customers of BT's wholesale arm. So between them, two companies basically have the ISP market sown up. Far from getting fined by the government, BT is the only company getting government funds to roll out rural broadband services - as usual with such schemes, the big incumbents are the only companies big enough to take on the grand government schemes, and so their position is reinforced by a fat helping of taxpayers money.

Re:Ah, Crony-Capitalism! (0)

Anonymous Coward | about 4 months ago | (#46682397)

New to this thread here.
I'm an American in the U.S.

Here is what I think needs to be done, here, though...
(If not already done.)
1. Consider making power companies non-profit or have a profit cap. Excess profit would be refunded in the form of a rebate.
2. Cable companies which have right of access should be required to...
a) share a portion of the cable out with competitors at a reasonable price,
b) give up right of access in the market area and allow competitors to lay their own cable, or
c) offer a discounted cheap package (1.5mbps Internet + limited basic Cable) for $20 per month + taxes. No fees except for modem rental and extra cable boxes in excess of 2. (Boxes 3+ could have fees.)

Re:Ah, Crony-Capitalism! (3, Informative)

SuricouRaven (1897204) | about 4 months ago | (#46682623)

" Virgin (the only cable provider in the UK)"
Because they acquired all their competitors. There used to be more, Virgin bought them all up.

Re:Ah, Crony-Capitalism! (1)

aaarrrgggh (9205) | about 4 months ago | (#46682677)

The energy solution is fairly straightforward: focus on diverse sources of energy at the local scale. Electricity, natural gas, solar, wind, and in a pinch diesel can all be used for the same purpose, and you can "load balance" between them.

Unfortunately, at the residential ISP level it is much more cost conscious. You can easily have a land-line solution and mobile, or even multiple mobile solutions, but it is much like using the diesel as a backup for home electricity-- good in a pinch, but expensive. Having multiple land-line services just adds cost since they are not billed on a usage basis. Maybe if two networks each offered only 99.5% availability it would make sense, if costs were sufficiently low.

Google's investment is actually fairly small , especially if their network is transformative. At $600 for the wiring per house passed, 50% penetration, $500/subscriber in NRC, and a $50/month service charge you get a 14-15% 5-year rate of return. Add an extra $10/month to cover legal fees and it is a pretty solid investment. If you drop penetration to 25% though it is hard to make it work for less than $80/month, which is really why there is limited competition.

There are 1000's (1)

DarwinSurvivor (1752106) | about 4 months ago | (#46681939)

There are 1000's of ISP's in the United States. WISPA [batchgeo.com] alone has a huge number of members, and those are only ISP's offering wireless.

Re:There are 1000's (1)

thaylin (555395) | about 4 months ago | (#46682113)

The first 3 links I clicked on took me to websites that did not work....Second what kind of wireless? Hotel rooms, airports? If so they are not the type of ISPs they are talking about here, and are more of just home network maintainers.

Re:There are 1000's (1)

tmosley (996283) | about 4 months ago | (#46682565)

I get my internet wirelessly off of a nearby tower. My small city of 200K has numerous companies offering the service at various qualities and price points.

Re:There are 1000's (3, Insightful)

faedle (114018) | about 4 months ago | (#46682619)

My small city of around 200K just had one big wireless player (who also happened to be the cable company) announce they are leaving the market (and selling the spectrum licenses to one of the big guys) and the other three I know of buy their bandwidth from.. well, that same cable company and/or the local telephone company. There's no other place to ultimately buy bandwidth: there are three companies that transport and transit: the big regional telephone company, the local cable company, and Facebook. Everybody else is buying and selling Internet from the big guys.

I can't talk about the health of the small wireless ISPs here, but if you sit down and do the math, they are likely just barely making a profit. This may be why the local cable company has exited the wireless ISP market. (I live in an area with a small urban center surrounded by miles of farms and ranches, the cable company's strategy was to use the wireless to extend their range to these rural subscribers and infill in the few areas their cable network didn't cover). And this small cable company had the first LTE network on in the state, so they had a hell of a head start.

That's pretty much the picture in most places: the little guys are very little and increasingly getting smaller, and the big guys are only getting bigger.

Re:There are 1000's (1)

DaMattster (977781) | about 4 months ago | (#46682807)

There may be a way for small, rural WISP operators to do this on part-time basis. How much daily attention does a small town WISP's infrastructure really need? It might make a nice supplementary income and you could offer it relatively inexpensively in return for a lesser service guarantee.

Address exhaustion (5, Interesting)

Anonymous Coward | about 4 months ago | (#46681975)

Address exhaustion means all new entrants are locked out anyway. To become a major US ISP you would need to control several /8s worth of IPv4 address space. There is no longer enough unallocated space to grant that to a new company. So the only way, regardless of other considerations, to become a big ISP is to buy an existing big ISP.

The same is true in Europe. You cannot build a new European ISP, because you would need a sizeable network allocation and they're all gone. As a new entrant you would receive roughly the address space needed to run your data centre, leaving nothing for customers. And that's it, forever. Could you buy what you need on the "open" market? Sure, buy from your competitors at a price they specify, that sounds like it would definitely work...

Re:Address exhaustion (2, Insightful)

Anonymous Coward | about 4 months ago | (#46682369)

Address exhaustion means all new entrants are locked out anyway. To become a major US ISP you would need to control several /8s worth of IPv4 address space. There is no longer enough unallocated space to grant that to a new company. So the only way, regardless of other considerations, to become a big ISP is to buy an existing big ISP.

As long as you don't hide it from your customers I don't see a problem with providing IPv6 addresses to your customers and perform NAT for accessing IPv4 hosts.
When you are open about it you give the customer a choice. Either to go with your service with its limitations or with the crappy service of one of the other players.
Customers who wants to run an IPv4 capable server at home might not be able to enjoy your alternative but if the other services sucks then might opt for renting some server space elsewhere for that.

Re:Address exhaustion (1)

fulldecent (598482) | about 4 months ago | (#46682647)

> Address exhaustion

I stopped reading after that part

For God's Sake, Internet is a LUXURY not a UTILITY (0, Flamebait)

Anonymous Coward | about 4 months ago | (#46681977)

Nobody NEEDS the Internet for anything. It is wholly and fully a luxury item. Being able to look at funny cat pictures is not a dire necessity for anyone to get through life, and there is nothing that can be accomplished on the Internet that can't be accomplished by some already-established method.

There is no rational basis upon which to make the claim that the Internet is a utility.

Re:For God's Sake, Internet is a LUXURY not a UTIL (5, Insightful)

Alioth (221270) | about 4 months ago | (#46682005)

You could have said the same thing about telephone 100 years ago, too, and the same thing about electricity at around the same time.

It is increasingly the case where you are excluded from participating in some parts of modern society if you don't have a decent internet connection. For instance, you're not going to be doing any MOOC courses if you don't have an internet connection that's good enough for video. You're not going to be able to find things out as easier as other people if you don't have a decent internet connection, and you can find yourself denied of many opportunities. It's not all about looking at cat photos. The internet has become embedded enough in modern society that you are now often at a disadvantage if you live in the US and don't have it, so just like the telephone became a utility, internet should also become available on a similar basis.

Re:For God's Sake, Internet is a LUXURY not a UTIL (1)

Anonymous Coward | about 4 months ago | (#46682053)

Here the Netherlands much of the communication with the government is done over the internet, and I imagine this will only increase, also in other countries. But treating the internet as a utility is pretty much a requirement for this to work, as it doesn't make sense to make the ability to communicate with ones government a luxury.

Internet access is a right.

Re:For God's Sake, Internet is a LUXURY not a UTIL (5, Informative)

plopez (54068) | about 4 months ago | (#46682245)

Except for banking. And filing some legal papers. Education. Weather reporting. Checking commodity reports, which is very important to farmers. Rapid shipping of design documents to job sites. Those are just a few I can think of.

Re:For God's Sake, Internet is a LUXURY not a UTIL (0)

penix1 (722987) | about 4 months ago | (#46682479)

*GASP* Whatever did people do before the internet???!?!?

Let's see:

Except for banking.

Brick & Mortor at their local bank. Many still do it this way today given the security nightmare that online banking has suffered recently.

And filing some legal papers.

Again, a trip to the lawyer's office...

Education

That's why God invented schools...

Weather reporting.

NOAA Weather Radio...

Checking commodity reports, which is very important to farmers.

Phone call to broker...

Rapid shipping of design documents to job sites.

USPS/ UPS/ FedEx Same Day Delivery...

Those are just a few I can think of.

Keep thinking since there is nothing that truly requires the internet.

Re:For God's Sake, Internet is a LUXURY not a UTIL (0)

Anonymous Coward | about 4 months ago | (#46682603)

Doing taxes in the Netherlands.
Yes, it is no longer possible to use paper, you are required by law to fill them in on the Internet.
I guess you could do it via an accountant, which will do it on the Internet for you, however since you are still responsible for what your accountant does they might as well not exist.

Re:For God's Sake, Internet is a LUXURY not a UTIL (3, Informative)

PrimaryConsult (1546585) | about 4 months ago | (#46682633)

And compared to using the internet, every one of those alternatives is either more expensive, more time consuming, or both. As time goes on, the brick and mortar method will become 'depricated' as anyone still catering to that group will be less cost effective than their online-only counterparts. Obligatory car analogy: Once upon a time, people could get anywhere they needed to go via public transportation or by simply walking. Automobile travel enabled the 'big box retailers' model, and local businesses in small towns evaporated.

Same thing with cell phones: People once used a combination of pagers and pay phones. Now there's very few pay phones, so that model is no longer viable.

Re:For God's Sake, Internet is a LUXURY not a UTIL (1)

aaarrrgggh (9205) | about 4 months ago | (#46682729)

Not sure why I am feeding a troll here, but your arguments are akin to "let them eat cake." Things that consume time for no real value are a tax; Internet service helps you avoid that tax so you can spend your time doing things that are economically, socially, or emotionally productive.

Re:For God's Sake, Internet is a LUXURY not a UTIL (1)

Gr8Apes (679165) | about 4 months ago | (#46682853)

*GASP* Whatever did people do before the internet???!?!?

Wasted a lot of time going to the bank, lawyer's office, USPS/UPS/FedEx, listening to crappy NOAA for the item of interest to come up, spend hours getting through to your broker to sell during a market drop, etc etc.

While you may have the time to do all those things, some of us are actually working and fully booked. I can live without all of them, much like I can live without electricity, gas, or even sewer/water service (solar/generators, wood fired stoves, septic systems and wells) but those are all much more inconvenient than the "utility" services.

Re:For God's Sake, Internet is a LUXURY not a UTIL (1)

theskipper (461997) | about 4 months ago | (#46682745)

Corporate profits and GDP growth have a pretty strong dependency on productivity numbers. Over the last 20 years a majority of the rise in productivity was due to the massive network buildout for telecom and internet.

So nowadays the internet is inextricably linked to the economy as a whole. Akin to other vital components such as electricity...things that qualify as "utilities" because of their economic importance to our society. Try removing the internet and see what the effect is on your 401-k.

Different views on a free market (3, Interesting)

staalmannen (1705340) | about 4 months ago | (#46682013)

I often see to very different views on the concept of a free market. One is "free from intervention" and is producer-focused, which often leads to one or a few domninant players due to network effects and/or scale advantages. The second one can be interpreted as "optimal competition" and is consumer-focused, where regulations (antitrust, enforced standards, consumer protection etc) try to make sure that the consumer always has a choice and that a market can not stagnate into its stable state of one or a few dominant players. I think the telecom market in the US vs EU (and probably most of the world) is a good example. In most places, the government has mandated a single standard (for example GSM) and rules for roaming on a network. This has led to a big market of small service providers on a few networks (there is for example stiff competition on prepaid SIMs). What I have understood from the US, differing standards between the providers coupled with a subsidized payment plan for the phone effectively causes a lock-in situation for the consumer. I am definitely leaning in favour of the "optimal competition" interpretation of a free market (how can a market be free if the consumer does not have a choice?).

Re:Different views on a free market (1)

Anonymous Coward | about 4 months ago | (#46682099)

Mandating standards is stupid. This really hinders usage of new technologies. Here in Belgium they just made the cellular bands technology neutral, if you have a license for a cellular frequency you may now use whatever protocol you want (broadcast frequencies are different, emitting something else than FM for example around 100MHz is not yet allowed, but will be in a few years when it will become digital). This immediatly spurred innovation and we now have much better 4G coverage, with some other providers opting for WiMax. It seems that 4G is going to win, but before we had none of either.

Re:Different views on a free market (0)

Anonymous Coward | about 4 months ago | (#46682115)

Disclaimer: With 4G I mean LTE, WiMAX is technically also 4G.

Re:Different views on a free market (2)

thaylin (555395) | about 4 months ago | (#46682119)

And you will be back whining in a few years about consume lockins that comes with what you talk about.

Re:Different views on a free market (1)

Sique (173459) | about 4 months ago | (#46682209)

Mandating standards is so stupid, that every vendor uses its own plugs, has his own specification for power, his own definition of racks... This fosters innovation, right?

No. Having standards is actually a precondition for competition. Your product can only compete with another product if there is any base for comparision. And that base is called a standard. There are governmentally mandated standards, and there are industry standards, but they are standards nonetheless. If you want to know how horrible a situation without standards can get, look at the U.S. railway system before 1850. For a trip from Philadelphia to Charleston, you had to change trains seven times, because eight different companies were operating the tracks inbetween, each one with a different gauge. Governmentally regulated standard gauges changed that, and just this improved services on all train services, because only now a waggon could go across the tracks of different operators.

Yes, standards can become entrenched and starting to hinder innovation if being to rigid and not allowing for flexibility in the areas where most of the innovation happens, but that's a problem one can attack of the situation arises. Until then having a standards is at first a blessing for both producers and consumers alike.

Re:Different views on a free market (1)

swb (14022) | about 4 months ago | (#46682211)

Cellular providers aren't in the equipment and RF technology business. All you'll end up with are incompatible variations on the same standard which leads to lock-in and more expensive handset prices. Any opportunity to "innovate" on technology confronts the need to have equipment supporting this innovation and cheap handsets from popular makers to support it.

Re:Different views on a free market (1)

Wootery (1087023) | about 4 months ago | (#46682331)

This immediatly spurred innovation and we now have much better 4G coverage, with some other providers opting for WiMax.

Were these technologies legally forbidden from being deployed? If so, the old regulations certainly were holding back the new technologies, but it doesn't mean that enforcing standards is always a bad idea. Rather, it means you should keep your laws up to date.

Re:Different views on a free market (4, Insightful)

plopez (54068) | about 4 months ago | (#46682253)

Free Market != unregulated market. In fact an unregulated market often becomes a captured market, e.g. monopolies. Too bad most people confuse that.

Re:Different views on a free market (0)

Anonymous Coward | about 4 months ago | (#46682387)

It seems that most capitalists forget that, too.

maybe the internet should be put in space (1)

FudRucker (866063) | about 4 months ago | (#46682027)

with dozens of satellites in orbit and then no ISP subscription needed, FREE internets for everybody with an internet capable device, smartphone, tablet, laptop, desktop, etc...

that would make ALL ISPs obsolete

Re:maybe the internet should be put in space (0)

Anonymous Coward | about 4 months ago | (#46682051)

Lantecy would suck, unless it's low earth orbit but you will need a lot of groundstations in that case (which are far from free)

Re:maybe the internet should be put in space (3, Insightful)

heypete (60671) | about 4 months ago | (#46682173)

with dozens of satellites in orbit and then no ISP subscription needed, FREE internets for everybody with an internet capable device, smartphone, tablet, laptop, desktop, etc...

that would make ALL ISPs obsolete

Who pays for the launches, the satellites and the constant adjustments needed to keep them in proper orbits, the ground stations, and the staff needed to run everything? Those are hardly free.

Re:maybe the internet should be put in space (1)

gnupun (752725) | about 4 months ago | (#46682615)

Satellites are too expensive and slow. Instead, why doesn't the govt dig the trenches for the internet optical fibers using taxpayer money, then lease them out to competing internet providers. That is, the the conduit/hole/trench belongs to the govt and the local people, but the wires within the conduit belong to the internet companies. This way, many internet companies can compete because of they only have to install new fibers in already existing trenches, drastically reducing cost and encouraging competition and thereby lowering costs to consumers per Mbps speed.

You people are so ignorant... (4, Interesting)

Karmashock (2415832) | about 4 months ago | (#46682047)

All these idiot posts about how its the market that is constraining ISP development.

Never mind that it is a heavily regulated industry that is very hard to launch on a small scale despite logistically being very easy.

What drives the costs up are the pole fees. They're way too high.

Sell the poles to a co-op. And then let that co-op spread the cost of maintaining the poles around its members.

This should not be under the control of the cities. They just see it as a revenue making opportunity. And that attitude keeps the cost of using the poles high.

Sell it to a co-op. Then we can all use the poles/pipeline for anything.

You could have tiny mom and pop ISPs. That would be in everyone's interest except for the big telecoms.

Re:You people are so ignorant... (2)

EmagGeek (574360) | about 4 months ago | (#46682073)

You will never convince local governments to give up such a lucrative revenue source.

Re:You people are so ignorant... (4, Interesting)

Karmashock (2415832) | about 4 months ago | (#46682125)

And that's fine. But at least recognize what the problem is instead of hairing off in a dozen retarded directions that have NOTHING to do with the problem.

Then if people ACTUALLY care they can have an ACTUAL discussion about the ACTUAL problem.

It doesn't stop at ISPs. Its a big deal with power companies as well. Take your monthly power bill. Do you know that a big chunk of that is a connection fee? Same deal as with the ISPs. Lets say you've got a big solar array on the top your house and you actually don't use any net power. Guess what... Local utility still wants a connection fee. And that connection fee is set by the cities and counties. Not by what it actually costs but by what they change YOU.

All of this needs to get sold to a series of non-profit co-ops. They need to not turn into huge organizations or they'll get corrupt. Keep them small and problems will be local problems and corrupt leadership will be replacable.

Let it get huge and you'll get some national political cartel in charge of it all and they'll just rape it like its already being raped.

Meanwhile in other countries (1)

Anonymous Coward | about 4 months ago | (#46682203)

When I look at my electricity bill I actually see how much the connection fee is. Mostly because it is itemized in the billing. I can also pay any power company for the power, but the "connection" fee still comes from the local company, because hey, they are the ones keeping the power transfer network in operation. The local company that owns the poles is highly regulated. They can't make too much profit. Basically so little it's only a good investment if you want to protect your money from inflation. If I had my own solar panels I would still have to pay the "connection fee" if I wanted to stay connected to the grid. I, however, could actually sell my excess production to the power grid. (this varies, and also needs some special equipment. They need to be able to cut me off the grid when doing maintenence, grid stability has to be maintained etc.)

The same basic principle also applies to former phone networks. The actual copper is owned by a separate entity, that has to lease the last mile to the company the _customer_ wants to do business with. Different companies offer isp services. They all pay the same amount per customer access to the copper owning company. Works great.

Water is still all in public utility company, both pipes and actual drinkable water running in those. I guess you could separate those two also, but then again, the same fee also covers sewers.

Internet as a utility (including poles) (2)

davecb (6526) | about 4 months ago | (#46682457)

Courtesy of Nat Torkington of O'Reilly and BoingBoing, video interview with Susan Crawford [vox.com] about why the Internet should be treated like a utility. She’s the only policy person I see talking sense. There’s a multilarity coming, when a critical mass of everyday objects are connected to each other via the Internet and offline devices become as useful as an ox-drawn cart on railway tracks. At that point it’s too late to argue you need affordable predator-proof Internet, because you’re already over the (sensing, e-ink covered, Arduino-powered) barrel.

Re:You people are so ignorant... (1)

Lumpy (12016) | about 4 months ago | (#46682541)

"Never mind that it is a heavily regulated industry that is very hard to launch on a small scale despite logistically being very easy."

This is not because of "regulations" it's because of anti competitive measures like "franchise fees" that are nothing more than mob style kick backs to local governments. Comcast loves them because it makes it near impossible for a new company to come in and compete with them in a market.

Get rid of the fraking kickback corruption at the city and county (and state) levels and you will see things change faster.

Re:You people are so ignorant... (1)

SEE (7681) | about 4 months ago | (#46682905)

This is not because of "regulations" it's because of anti competitive measures like "franchise fees"

So, it's not because of "regulations", just government . . . I guess we'll call them "rules" . . . that require payment of fees in order to be allowed to compete?

If the government, at any level, has the regulatory power to say no to new competitors entering a business, the incumbents in that business will spend money at that level to convince them to say "no" to new competitors. It has happened every single time, with every single industry than any country every has ever allowed its government to regulate what businesses may enter a market. From medieval guilds to Elizabethan patents to taxi medallions to the FCC, it always happens.

And it happens every single time because regulation causes corruption. Public choice economics can no more be repealed by the ignorant but well-meaning than pi can be made to equal exactly 3.

Re:You people are so ignorant... (0)

Anonymous Coward | about 4 months ago | (#46682625)

If you think ISPs and their lobbyists aren't spending millions a year to squash local and municipal ISPs, you're either ignorant or a shill.

Re:You people are so ignorant... (1)

Karmashock (2415832) | about 4 months ago | (#46682851)

I am sure they are... but who do I blame for corruption?

The man that walks into the room with the suitcase full of money or the corrupt oath breaking son of a bitch that takes it?

I'm not stupid. I know that there is always going to be that guy walking in the room with a briefcase full of money. That guy is everywhere. The whole world over. Always has been and always will be.

You can't get rid of that guy. He's a force of nature.

But the guy that takes the money? That is controllable. Proven by the fact that there are relative degrees of corruption throughout the world largely in relation to the extent a society both looks for and then punishes corruption and fraud.

Here is the part where you say slack jawed and drooling that the guy passing out the money is responsible as well. I never said otherwise, fucktard. I said rather that you can't stop him. He's going to be there regardless. Attacking him is like trying drive the tide back by swatting it with a rolled up newspaper. Utterly futile. Always was and always will be.

But go after the politician that takes the money? Go after the guy that takes the money? Now... that you can do. For one thing there are a finite number of people that make those sorts of decisions. You can track them. You can task other people to watch them. The guys with the money... what are you going to do? Watch everyone with money? Watch every company? Have fun with that. But watching the interactions between business interests and government officials? Totally manageable.

Which is why the smart move is to track the politicians and when you smell corruption dig... and when you find it... burn them.

now since I likely wasted my time bothering to explain anything to you... go fuck yourself and die, asshole.

Loser Pay Legislation (3, Informative)

smpoole7 (1467717) | about 4 months ago | (#46682087)

Loser-Pay Legislation would take care of the second one. Been saying it for years.

Eventually, those folks who oppose it simply because it seems too "conservative" for their politics are going to get their minds right.

The United States is the only major Western Democracy that doesn't follow the "british rule," where the winning party in a lawsuit is generally allowed to recover the costs of bringing or defending a suit.

Re:Loser Pay Legislation (1)

Anonymous Coward | about 4 months ago | (#46682319)

> Eventually, those folks who oppose it simply because it seems too "conservative" for their politics are going to get their minds right.

And eventually everyone will no longer need the SEC because the "invisible hand" will make all market abuse unprofitable. My, you *are* an optimist, aren't you?

Re:Loser Pay Legislation (3, Interesting)

Lumpy (12016) | about 4 months ago | (#46682571)

Except it makes it even easier to bully people in court.

I crash my car into your house, I then show up with 500 lawyers and sue you for 22.2 million dollars for building your house in my way. you are looking at $10 million if you lose, How about we settle out of court for $150,000 instead? you cave in because your lawyer states that I can bleed you dry in legal fees and you really should take the settlement.

It already happens today, but now I can financially MURDER you easier. What is needed is a LIMIT or CAP on legal fees that can be spent in a court case to 10% of the lowest income persons total income, so if AT&T sues you, they cant spend more than 10% of your income, thus keeping them from bleeding you dry.

Re:Loser Pay Legislation (1)

Gr8Apes (679165) | about 4 months ago | (#46682887)

What is needed is a LIMIT or CAP on legal fees that can be spent in a court case to 10% of the lowest income persons total income, so if AT&T sues you, they cant spend more than 10% of your income, thus keeping them from bleeding you dry.

Now I like that idea, except if you're suing a homeless person. I'd say keep recoverable fees at 10% and actual expenditures under the median income. Still a nice limiter that's automatically indexed to inflation.

Re:Loser Pay Legislation (1)

bill_mcgonigle (4333) | about 4 months ago | (#46682803)

We already have a legal system where the person with the best-paid lawyers almost always wins, regardless of the merits, and now you want them to be able to recover the cost of those high-paid lawyers?

What you're saying makes sense if the courts provided some objective measure of justice, but that's not the case here - you're suggesting we double down on the corruption.

Re:Loser Pay Legislation (0)

Anonymous Coward | about 4 months ago | (#46682863)

Loser-Pay Legislation would take care of the second one. Been saying it for years.

Eventually, those folks who oppose it simply because it seems too "conservative" for their politics are going to get their minds right.

The United States is the only major Western Democracy that doesn't follow the "british rule," where the winning party in a lawsuit is generally allowed to recover the costs of bringing or defending a suit.

A good idea, but with the recent Supreme Court decision to allow unlimited bribery of politicians I wouldn't hold my breath. Using frivolous lawsuits to stifle competition is a standard tool of the megacorp and it's not going away as long as corporate entities are considered people. Look at Comcast buying Time Warner, this is clearly not in the best interest of the consumer, and clearly violates Sherman anti-trust, but the regulators are looking the other way while their palms are filled with cash.

Stop dreaming. (2)

hebertrich (472331) | about 4 months ago | (#46682095)

As long as politicians are involved and their little brown unmarked envelopes are passed from the actual players to them and industrials can contribute whatever they like to their campaigns , as long as money buys the politicians freely you think that politicians will actually do something ?

Wake up. Politicians in the USA are owned by industry and rich contributors. The interest of the People ? they couldnt care less.
In the USA , it's a governemnt of the people by the corporations for the corporations.

yea no (0)

Charliemopps (1157495) | about 4 months ago | (#46682111)

It cost google over $500 per customer to install when it got to pick and choose their customers. The local ISP is required by federal law to provide phone service to ALL customers. The actual cost per customers if you actually have to serve everyone is in the thousands. And yes, of course th local ISP is going to sue. It's the only legal recourse they have to fight a company that clearly has them at a regulatory disadvantage. Telcos are going bankrupt all across this country right now and it's not because they're raking in the money by over charging you.

Re:yea no (4, Informative)

jpatters (883) | about 4 months ago | (#46682155)

Oh stuff a sock in it.

The cost for the infrastructural build out of basic telephone service, which is what the incumbent telcos are required to provide, was paid for decades ago and with significant taxpayer subsidies. None of the incumbents are required to provide universal internet service at all, let alone reasonably useful universal internet service, so your complaint is bull crap. Also, Comcast/Time Warner/Charter etc are not required to provide any level of universal service.

Re:yea no (1)

Pop69 (700500) | about 4 months ago | (#46682251)

I'm a bit confused by your ideas.

Why would an ISP be required to provide any sort of phone service ?

Re:yea no (1)

adam525 (813427) | about 4 months ago | (#46682409)

I think what he meant to say was that small telcos (CLEC's, etc) are required to provide landlines to everyone in the area they serve (not that too many people use landlines anymore). As far as ISP's go, they aren't "required" to serve anyone...

Why? (1)

angel'o'sphere (80593) | about 4 months ago | (#46682223)

Why are there no oil company start ups?
Why are there no new generation nuclear power plant start ups?
Why why why .... why is that question on /. ?
It is mainly the stupids question I have seen since ages.

What is a start up? A small company of 5 to 10 or if you have the money 20 people. How should 20 people manage to be an ISP ... with what backbone, what grid, what wires?

To become an ISP you need multiple of billions of money ... or new laws with access to existing wire infrastructure.

Re:Why? (0)

Anonymous Coward | about 4 months ago | (#46682405)

How should 20 people manage to be an ISP

With a sentient computer, an anthropomorphic dust ball, and a crazy Russian.

Re:Why? (1)

dkf (304284) | about 4 months ago | (#46682487)

Why are there no oil company start ups?

What makes you say this? Is it just because you don't notice them?

Re:Why? (1)

Anonymous Coward | about 4 months ago | (#46682711)

Bullshit, *IF* the networks are open. Working at a small ISP (15 people), startup costs was less than 300k EUR, we have no own grid/wires but have wholesale access to about every fiber/dsl network in the country.

Re:Why? (1)

aaarrrgggh (9205) | about 4 months ago | (#46682875)

To become an ISP in an area that requires underground utilities you need a good stash of money, as it will take at least two years from start of negotiations with the city to providing service to your first customer. Call this about $2,000/customer passed for bridge funding. You also need to be able to spread your investment out over ~10 years to make good use of resources.

That comes to about $2MM cash in order to serve your first 500 customers with 50% penetration, plus access to about $4-6MM in financing after your network is operational.

Above ground utilities are much easier, as there is only about a 6-month lead time for stringing a new cable. $2MM should be able to get you a build-out that can serve 2,000 customers with much lower risks, and no need for financing unless you really want to grow from there.

But in the end, you really need something that gives you an edge in the market, especially something that the incumbents cannot replicate quickly.

They already are (0)

Anonymous Coward | about 4 months ago | (#46682229)

The cable company, which by default is the ISP for most urban dwellers, is a utility. They collect fees and pay the municipality for the right to be a legal monopoly

Sounds like a job for KickStarter (0)

Anonymous Coward | about 4 months ago | (#46682259)

If people are really fed up with Comcast/Cox (ME ME ME), it seems to me they'd be willing to commit some serious cash for an all-or-nothing KickStarter to launch regional ISPs. Of course, the team(s) would have to be well-qualified to be able to get the job done once the money is there - so that rules me out - but surely such a team exists. Merely by raising their hands, such a team would get control of millions and millions of dollars to get the job done.

Hanc (0)

Anonymous Coward | about 4 months ago | (#46682261)

wery good facebook video izle indir [facebookvi...eindir.net]

Why There Are So Few ISP Start-Ups In the U.S. (1)

mmell (832646) | about 4 months ago | (#46682313)

Because NSA is tired of adding new ISP's to their list of "insert monitor here" entities? 8^O

Vertical integration needs to be banned (0)

Anonymous Coward | about 4 months ago | (#46682573)

The problem in the USA is vertical integration.

The cable to get your broadband Internet comes from the same company as the one that provides you with Internet which is also the same as the one that provides you with television.

Imagine if you could take Comcast and split it up into physical cable provider, television content provider and internet provider. No common ownership structure allowed upwards or downwards. Now the ISP company needs to buy access from the cable provider at a wholesale level that should be offered to all ISPs at the same rate.

If there aren't enough IPv4 addresses then just become an IPv6 ISP with an appropriate IPv4 - IPv6 gateway.

Re:Vertical integration needs to be banned (1)

EvilSS (557649) | about 4 months ago | (#46682715)

The problem in the USA is vertical integration.

The cable to get your broadband Internet comes from the same company as the one that provides you with Internet which is also the same as the one that provides you with television.

Imagine if you could take Comcast and split it up into physical cable provider, television content provider and internet provider. No common ownership structure allowed upwards or downwards. Now the ISP company needs to buy access from the cable provider at a wholesale level that should be offered to all ISPs at the same rate.

If there aren't enough IPv4 addresses then just become an IPv6 ISP with an appropriate IPv4 - IPv6 gateway.

I kind of agree with this but there is a problem: The biggest competitive advantage most providers have is their physical network. If you remove that, we end up with a "race to the bottom" situation. That ends up with consolidation of players (since no one can gain a pricing advantage since they would all have essentially the same costs) and pretty much bring us back around to where we are now. At least for internet access. For content, it's who can get the best deals, which will go to the bigger companies. Since the providers would no longer be constrained by region, we would end up with a lot of fragmentation when it comes to content. At least at first. After a while the content producers would realize they didn't need a middle man and go direct. That could be a good thing. It could also be annoying if they force you through their own sites/devices.

Can't blame the incumbent or the governments (0)

xednieht (1117791) | about 4 months ago | (#46682639)

There were thousands of independent ISPs once, they extincted themselves because they lacked the vision to work together and instead died one by one. I had a ringside seat.

Re:Can't blame the incumbent or the governments (2)

DaMattster (977781) | about 4 months ago | (#46682741)

There were thousands of independent ISPs once, they extincted themselves because they lacked the vision to work together and instead died one by one. I had a ringside seat.

They went extinct because the cost of building the infrastructure to provide the broadband internet access that consumers now demanded. It fell on king telecom to build that out. Even with the number of ISPs that you pull out of the air, I doubt they could collectively come up with the 100s of millions necessary to make this happen. Government helped the big boys make it happen and also created regulatory nightmares to ensure that the telecom industry is an oligarchy.

There may be a way (3, Interesting)

DaMattster (977781) | about 4 months ago | (#46682717)

To become a small town ISP by providing longer range WiFi and deploying it in the 5GHZ or 24GHZ spectrums. Ubiquity makes very reliable equipment to make this happen and if the area is terrain-friendly, it certainly is possible. To build out a high speed, broadband wired infrastructure is nearly impossible with the government and regulatory issues alone. Ever notice how the large telecom corporations wine about free markets when bills are introduced that don't favor them but when the legal winds are in their favor, it is "fuck free markets, we want to own it!"

If all you have is a hammer... (0)

MrLogic17 (233498) | about 4 months ago | (#46682759)

In other words, there's too many governemnt regulations to have new competition, therefore the solution is to add more government regulations.

Perhaps, just perhaps, the solution is to allow very small startups the ability to compete in individual buildings and small cities.

A Utility! Of Course! (0)

Anonymous Coward | about 4 months ago | (#46682769)

Absolute genius! Make the Internet a utility! Then, for the first 20 years, the national ISP can enjoy a monopoly, and screw us. THEN - we can have "deregulation", and break up the monopoly, and end up right back where we are now! Truly inspired idea!

Anti Competitive Regulation (2)

Narcogen (666692) | about 4 months ago | (#46682859)

US telco regulation does the opposite of what such regulation is supposed to do: promote competition, preserve consumer choice, reduce prices, and increase the quality of service. Monopolies granted by municipalities to cable operators, and the deregulation of the Baby Bells, do exactly the opposite-- they protect incumbents with entrenched positions and raise barriers to entry. It's a classic case of regulatory capture on multiple levels.

The idea of municipalities now wanting to run their own ISPs, because it's so clearly a job they should be and can be doing better than the private sector-- is now resulting in lobbying groups sponsoring legislation to make it illegal to do so in order to preserve the monopolies-- is surreal to the point of absurdity.

Load More Comments
Slashdot Login

Need an Account?

Forgot your password?
or Connect with...

Don't worry, we never post anything without your permission.

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>