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View Full Version : An interesting alternative to the traditional ISP model



PedroDaGr8
06-16-2016, 09:37 AM
Hopefully, this won't get to techie, but as most of us know one of that MANY of the largest issues threatening the freedom of the internet (data caps, anti-net-neutrality, etc). all come down to the exploitation of businesses due to a lack of competition. Many of the practices that the large cable/dsl operators foist upon their customers is because basically there is no competitor to stop them. There is no reason for data caps, which has been admitted in testimony by ISPs. The network overload that many of us experience is actually mostly manufactured and artificial to try to convince us to upgrade. Usually, these aggreements are in the terms of local franchise monopolies or duopolies, where a company is given a local monopoly to an area for a franchise fee paid to the local government. The ISPs love these because they can basically screw-over the constituents all they want, they have no other options. The government likes it because any ill will goes to the company, not to the government that created this situations in the first place.

Currently, one of the only other alternatives is the municipal ISP, where the city (or other administration like Tennessee Power) takes over the ISP duties. This is usually done either in direct competition with the ISP or in the more severe cases as a direct replacement of the ISP. Critics of the municipal ISP say that it is unfair for the government to compete against private companies, which is a fair criticism to SOME degree (though not entirely). The main counterpoint being that these companies are not actually competing in the first place because they are often given a the monopoly or duopoly and their abuse of this setup is what dictated the formation of the municipal ISP. There are a variety of other arguments both for and against these scenarios but they are more or less irrelevant to the rest of the discussion. The city of Ammon, Idaho ran into a common issue; they needed to context city hall to a municipal building roughly a mile away. They sent out requests for bids to the two major ISPs in the area. The first one didn't want it, the second one wanted to charge them an $80k setup fee and a $1k/mo usage fee. For a mile run, this fee is quite high and the city determined the same thing. They realized that they could build the link for around $22k and maintenance was a fraction of the $1k/mo. They also realized that as part of this, they could spread out and connect to other local government buildings and businesses in as the article says "in a fiscally responsible manner". They are now working to expand out to the various neighborhoods and homes in Ammon. Normally, this would be the beginning of a municipal ISP but Ammon took a different route. Instead of being the ISP, Ammon chose to be a "last-mile" fiber utility which then sources out the actual ISP function to any ISP that wants to hook up to their network and provide internet access. The ISPs pay Ammon a network maintenance fee and pay for their internet infrastructure. This dramatically reduces the barrier to entry for ISPs in the area, they no longer have to build a VERY costly local network before becoming an ISP. The city recouped their costs in 3yrs and is now operating in the black, as they expand to additional homes. As a result of the success, they have already had several new ISPs sign up to offer service, providing real competition for customers in a market that is void of competition. Now if they had stopped here, they would have basically reproduced the British Telco model, where most home users have a minimum of 6 ISPs to choose from. They took it one step further creating a portal to make it easy for users to change ISPs. No more retentions, no more hassle, a couple of clicks and your are done. If your ISP sucks and isn't providing what they claimed, you go onto the cities fiber website, open your account and click subscribe for a different ISP, and within minutes you are now officially a subscriber of that other ISP.

Quite simply, this is the true competition that the internet needs. If this were in place in most cities, net-neutrality discussion would be unnecessary, prevention of data caps would be unnecessary, the inherent competitions would stop any of these abusive tactics right in their tracks. Of course, you will see Comcast et al. fight this idea tooth-and-nail if it catches on, including their paid for senators and appointees like Pai at the FCC. They love their lack of competition and try to hide behind some pro-corporate republican and democrat senators to maintain said monoploy.

Link to the story:
http://arstechnica.com/information-technology/2016/06/what-if-switching-fiber-isps-was-as-easy-as-clicking-a-mouse/

Darrell KSR
06-17-2016, 11:58 AM
Hopefully, this won't get to techie, but as most of us know one of that MANY of the largest issues threatening the freedom of the internet (data caps, anti-net-neutrality, etc).....

I got lost there. My ceiling is very low. You bump it getting out of bed in the morning. CitizenBBN bumps it getting off the floor in the morning.

CitizenBBN
06-17-2016, 10:49 PM
I got lost there. My ceiling is very low. You bump it getting out of bed in the morning. CitizenBBN bumps it getting off the floor in the morning.

I figured out of wasn't a ceiling I was hitting. It was the under side of the bar.

I need to read up on this but I love the direction. Net neutrality is crucial and if we lower barriers to entry so isps aren't like utilities that should do it.

PedroDaGr8
06-18-2016, 11:07 AM
Personally, I am not against ISPs, as they are currently structured (this is an important qualifier), being regulated as utilities because in essence they are just that. I think you have to go through a lot of mental gymnastics to argue that they are not the modern iteration of a telecommunications utility. They are rapidly becoming, if not already are, a necessary function for modern daily life. So much in life, from job applications to government programs are only available via access by the internet. At the same time, this utility-like function and structure is what enables them to engage in rent-seeking and monopolistic behaviors. While usually the capitalist market system works great, even without the monopoly structure that often exists the barrier to entry is so remarkably high that it distorts the free market VERY heavily in favor of the limited few that can afford to pony up the money initially. As a result, this high barrier to entry more or less guarantees the kind of market distortions that we have been seeing. It kills competition and results in a non-free market even without government intervention. Additionally, one could give the argument there is a small degree of public good inherent in having a limited number of connections to the home. Just like we don't need 12 power lines coming into our house, we don't need 12 internet lines coming in. Yet in the current system, to have a free and competitive market, this is what you would require.

This is why I feel that this plan is so intelligent (and why the British Telco model has worked SO damn well for Great Britain). It basically decouples the utility side from the non-utility side. The utility side being the fiber to the home, the local city-wide network if you will and possibly in other systems even theoretically down to the local neighborhood level (I think smaller than that economies of scale work against you). It's these last mile connections which are SO damn expensive and provide the highest percentage of the barrier to entry. Bandwidth from point A to point B is damn cheap, even for high reliability, it is getting it from Point B to Point C1, C2, C3, C4, etc. etc. et.c that is so damn costly. Regulate this part like a utility, making it a part of the city, because this is the biggest part that distorts capitalism. The internet servirce provider side of things connections then becomes a competitive marketplace.

I will admit, there are still some inherent issues with a government run network, but the fact is, there is no way (at least at this time) to get rid of the barriers to entry that distort the free-market anyways. So no matter whether government or private, it will be a heavily distorted marketplace. At least in this case, you can get rid of a significant portion of the bad side, while concentrating the blame in a single area, making change much more effective and possible. Additionally, gets lazy on their network, they will get pressure from both the ISPs AND the public to upgrade. Providing TWO paths to encourage innovation.

Lastly, as for regulation, regulations are good at preventing bad behavior, but you can't regulate in good behavior. Only the free market economy with true competition can inecentivize good behavior. This is why I think the current regulation of ISPs while necessary in the current model, will only solve half of the problem.

CitizenBBN
06-18-2016, 04:00 PM
the ISPs are absolutely utilities, there's no way around it.

Utilities distort the free market b/c of the massive economies of scale and barriers to entry. It simply costs too much to have 6 different sets of electrical lines or sewer lines or gas lines to each home, and the same goes for fiber for internet.

It's probably the only thing Obama has done in 8 years with which I basically agree, the providers cannot be allowed to choose which websites and companies have the best access to homes. that's the nightmare scenario for the internet, which has flourished because of it's incredibly level playing field and near zero barriers to entry. It's critical we maintain that situation.

I also agree that, as much as I loath government doing anything, the nature of utilities is such that there isn't a big difference. There is some, and the publicly regulated utility market in the US has worked well overall, but we see the same "last mile" challenges with internet that we saw with electricity, leading to rural electric coops and outright government utility projects like TVA.

Now if you'll excuse me I need to go find a bar under which to pass out later.