How ISPs Collude To Offer Poor Service 207
alexander_686 writes "Bloomberg is running a series of articles from Susan Crawford about the stagnation of internet access in the U.S., and why consumers in America pay more for slower service. Quoting: 'The two kinds of Internet-access carriers, wired and wireless, have found they can operate without competing with each other. The cable industry and AT&T-Verizon have divided up the world much as Comcast and Time Warner did; only instead of, "You take Philadelphia, I'll take Minneapolis," it's, "You take wired, I'll take wireless." At the end of 2011, the two industries even agreed to market each other’s services.' I am a free market type of guy. I do recognize the abuse that can come from natural monopolies that utilities tend to have, but I have never considered this type of collusion before. To fix the situation, Crawford recommends that the U.S. 'move to a utility model, based on the assumption that all Americans require fiber-optic Internet access at reasonable prices.'"
Re:Make them operate like utilities. (Score:4, Interesting)
Re:Completely unforeseen! (Score:5, Interesting)
The history of utilities until they became massive monopolists was that various jurisdictions granted them easements, right-of-way, and lots of other considerations in exchange for getting services built. The telcos were independent, and a long distance network consisted of AT&T, ITT, and others. Then came Judge Greene, a breakup of AT&T, GTE and ITT consolidations of the Baby Bells, and the sense that utilities were unbridled and focused on shareholder return based on serious assets.
The landlines were different than what is now the Internet. Most were analog copper cables that had muxed data channels. Fiber is only the last 20yrs.
So there is this mixed bag of monopolist thought as we've boiled down the US landline carriers to six, wireless carriers of significance to four, each with a territory in landlines. Some communities did their own fiber optic services, but they're rare. Communities became forbidden after their state legislators were sufficiently bribed to prevent community utility access. Co-ops went the same way, although there are still some around.
Collusion? The telcos shifted much away from the State PUCs to the Feds with the TCAct, so they'd only have to fight (I mean bribe) Washington and deal with the FCC.
And in reality: this is a huge freaking country, and trying to cover it with copper, fiber, or wireless still takes a lot of capital. How do you get capital? A business plan with a guaranteed return on investment. How do you get guarantees for revenue floors? Collusion? What a bright idea.
Utilities are unique and used to be cooperatives and had a ceiling on revenues, each price increase in front of a state or perhaps federal committee, breathing down their necks to keep prices reasonable. Government doesn't protect people much anymore, it protects the interests of business in the blind faith that says: in doing so, you're disciplining investment. Bullshit.
Re:Interesting theory (Score:4, Interesting)
You're very much right that not everyone actually requires fiberoptic service. First, separating wants from needs is important. I'd like to have super fast fiberoptic, but I don't "need" it. Few of us do, really. We can be patient, and wait for ten minutes to get a file that would have downloaded almost instantly on fiber. So, we're in agreement there.
But, you're a lot less right when you say that the internet isn't required by everyone. In today's world, if you don't have internet, then you cannot be competitive with the competition just a couple miles away. I live out in the sticks, where internet service was very spotty until five years ago. The access that is available is still pretty crappy today.
My "auto parts" store of choice lost business to franchised auto parts stores, until they finally got online. People searching for things simply couldn't find them. The franchised stores were either on line, or they were represented by a corporate headquarters site which listed them, along with a map with directions to their stores. My supplier simply didn't exist. Even though I knew where they were, I couldn't go online to find out if they had a particular item in stock, or if they would have to order it.
Now that Mr. Baker has an online presence, he does get more business. His online presence isn't a very good presence, because he is not tech savvy, and doesn't understand the need to hire someone who is tech savvy. Still - he's there. And he gets business that he never did get before.
If the old guy would hire someone to market him online, he could gain a lot more business, because he offers things that the franchise stores don't. Farm and tractor supply parts, tractor trailer parts, small engine parts, that O'Reilly's and others don't offer at any price. The bulk of his business comes from word of mouth advertising. A real on line presence, tailored to suit his needs would easily increase his business by 10%, probably 20%. I could potentially increase his business by 100%, but there's no way to prove it until someone actually does it.
I say that in today's world, internet access is a necessity. You simply can't compete unless people can find you.
Comment removed (Score:5, Interesting)