[Afforess]

At this point, Cable companies are all members of a single large shadow monopoly not unlike Standard Oil was in the early 20th century. The rational the justice system used to break up Standard Oil is shockingly similar to the situation we now face with cable:

Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors" [1]

Cable companies regularly adjust prices based on the entrance of competitors (Google Fiber), or when a cable company enters a new market, prices are initially low to prevent competition and then slowly raised to a much higher level. The excuses for vast differences in rates in metropolitan cities are usually paper thin, but accepted by the media and government at face value. Cable companies also operate secondary businesses with a conflicting interest to their cable operations (Cable TV packages now directly competes with Broadband Internet, also see: NBC/Comcast), not unlike Standard Oil's purchase of many railways and control of shipping lanes. This arrangement vastly stacks the deck in favor of cable companies, and further cable company "cooperation" with state and national officials have created new restrictions on municipal competition.

Cable companies are our 21st century Standard Oil.

[1] https://en.wikipedia.org/wiki/Standard_Oil#Monopoly_charges_...

[imgabe]

It really is shockingly similar and a lot of the arguments against net neutrality try to dismiss it as applying "laws made for railroads" to the Internet.

Back when oil was getting to be useful, lots of people discovered it. Usually, it was in a remote area. The only way to make money off it was to get it to a refinery and then the market. Standard Oil bullied and bribed the railroads into giving them preferential rates and charging high rates for competitors. It's exactly like what cable companies would like to do by subverting net neutrality, give preferential treatment to the traffic that profits them most. It's just information instead of oil, which is even more insidious since it can control the public discourse.

[AnthonyMouse]

The thing is, cable is more like the railroad than it is like Standard Oil. Petroleum isn't at all like a natural monopoly. It took a lot of corruption and bribery for Standard Oil to keep competition at bay.

But nobody is really stepping forward to lay residential fiber. Google is the exception and it's because they're one of the only companies with enough money to survive a war of attrition with the incumbents, and even then it's only in a handful of places.

It's prohibitively expensive to have twelve companies each run a different strand of fiber to every house. And you only need one. The key is to a) get one instead of zero and then b) put competition on the other end of the fiber. Have one company (or municipality) be the regulated monopoly that provides only the physical layer, and then let all willing providers compete to terminate the fiber and provide internet/TV/phone service.

Separating the natural monopoly (the physical layer) from over the top services is the key to preventing monopoly abuse. The entity that does that should do only that.

[imgabe]

True. I recall reading somewhere that Japan has a law requiring the owner of the physical wires to lease them to anyone as long as they pay some set fee - sort of like mechanical royalties that we have for music. This is part of the reason why Japan has some of the fastest and cheapest Internet in the world.

[warfangle]

That's called last mile unbundling, and is one thing the FCC has refused to consider.

aDSL used to be unbundled, too. And while it was unbundled, speeds were increasing.

aDSL speeds have been pretty flat since they removed the requirement, even though newer DSL technologies are available.

[bogomipz]

Yep, local loop unbundling was a thing in the US, it was basically a provision in the 1996 Telecommunications Act to promote competition. It largely worked too, you used to have your choice of 10 or 12 DSL providers in the US. You could do that with things like copper local loops, I would love to see it with Cable but I suppose theres not a good way to share the local loops in cable plant as they are mostly fiber now. It too bad EEOC(ethernet over copper) never took off.

[lstamour]

> I suppose theres not a good way to share the local loops in cable plant as they are mostly fiber now

Well, here in Canada they're mostly fiber also -- but it still works. See, for example, https://www.teksavvy.com/ and https://www.start.ca/ ... "TPIA" is what they're called.

In looking them up, I stumbled on mailing lists for TPIAs hosted by Torix. Realised at that point that TPIAs have a lot in common with Canadian IXPs -- both put pressure on prices from Canadian ISPs, TIPAs by consumers and IXPs from businesses/services aghast at how much certain folks charge. See https://cira.ca/sites/default/files/cira-ixp-overview-web.pd... for more on IXPs. I wonder if there's a book on this somewhere, or what ISPs think. Rogers Cable peers with Torix, so it's not exclusively smaller players, in fact I'd say it's the everybody-but-telcos club but I'm sure telcos and US players are welcome if they cared to... (let's pretend they simply are unaware of the ahem, savings...)

[rahimnathwani]

Local loop unbundling works very well in the UK.

[mariuolo]

> aDSL speeds have been pretty flat since they removed the requirement, even though newer DSL technologies are available.

Playing devil's advocate here.

How would they increase adsl speed if it's very much distance-related? It tops out at 24Mbps and even then in ideal conditions.

Those newer DSL technologies require laying fiber closer to the customer and that's a nontrivial investment.

[izacus]

Huh? Here in EU the DSL speeds have been steadily growing up to 50Mbit without users doing much (ISPs deploy either modern ADSL2+ or versions of VDSL). A copper wire that could only carry 8Mbit before now carries full triple-play at 30+Mbits.

Most of that has come from legislation that forced the monopolistic owner of copper wires to let competition use them.

[Shivetya]

well when the state of Georgia deregulated natural gas sales that is effectively what happened. A management company became the owners of the gas lines, responsible for maintenance and expansion. That fee appears on every gas bill

[colechristensen]

There _are_ places where small companies are stepping up to place residential fiber.

http://fiber.usinternet.com/

[tomkinstinch]

In Rochester, NY we are fortunate to have a local company competing with Time Warner by offering gigabit fiber to the home[1]. The local company is hugely popular, and based on their rate of expansion, very successful.

When my house was built in 1890 it did not have electricity, and all rooms were illuminated by gas lights. As of last year, it has gigabit fiber. Infrastructure can change. It helps to have locals take action, and citizens have to be vocal.

1. https://greenlightnetworks.com/

[AnthonyMouse]

Sure, on a few dozen streets in the city center in a place without build out requirements. But what do we do about the suburbs?

[Spooky23]

Those are exceptions that prove the rule.

[dredmorbius]

See Eben Moglen's "Invisible Barbeque".

http://emoglen.law.columbia.edu/publications/barbecue.html

[Spooky23]

The people making those statements know that. Any "captain of industry" worth his salt wants to be like a Rockeffeler or a railroad baron.

Hell, 5-6 generations on, Rockeffelers are still filthy rich.

[ikeboy]

(My own views align closely with http://arstechnica.com/tech-policy/2014/06/we-dont-need-net-... and http://www.bloomberg.com/news/articles/2015-04-13/forget-net...)

Do you have any evidence that cable companies wanted to charge for preferential treatment for traffic? I've seen that claim repeated a lot but never with evidence.

[Spooky23]

Netflix is the canonical example.

A few years ago YouTube got similar treatment on Time Warner -- they funneled everything to a YouTube point of presence on the TWC network that was over saturated. You could modify DNS and use and alternate URL and watch 1080p video with no lag.

Verizon also started limiting aggregate Netflix traffic. Through conincidence, it happened to start happening when they launched a video service.

[ikeboy]

What happened with netflix wasn't covered under net neutrality anyway (as the links above point out), and they weren't being charged for prioritization, nor were they discriminated against.

[Spooky23]

This isn't a net neutrality discussion. It's about monopolistic behavior.

[ikeboy]

I responded to a comment saying "It's exactly like what cable companies would like to do by subverting net neutrality, give preferential treatment to the traffic that profits them most."

[dredmorbius]

Cable has a significant difference from oil.

Cable is a network technology with value defined somewhere between Sarnof's, Metcalfe's, or Tilly-Odlyzko's laws. Scale, and dominating local coverage, matter.

Oil is an extractive mineral resource with very low direct costs vs. use value. Absent some form of central contrl, the price has tended to fall far too low. In the aftermath of the East Texas oilfield discovery of 1930 (the biggest on the mainland lower 48), prices fell fist to $0.13/bbl, then to $0.02/bbl. That's barrels, not gallons.

The governors of Texas and Oklahoma called out their state national guards, and the Rangers in Texas, and seized wellheads at gunpoint to cut supply. The quota system imposed, run by the highly innaccurately named Texas Railraod Commission, lasted until 1972. Daniel Yergin's book The Prize covers this in detail.

A similar control program applied to strategic minerals was created after WWII, originally called the Hobard list, and remains in effect as part of the Defense National Stockpile Center.

Raw material and networking economics differ.

[stormbuilder]

Great info thanks.

It is entertaining how the stalwart protectors of free markets oppose them when it becomes too inconvenient.

[dredmorbius]

Funny, you noticed that too?

[nickpsecurity]

Great analysis. Cartel behavior as I call it should never be ignored in discussions on these subjects as it's been discovered so many times. Even more so when organizations are both non-competitive and taking taxpayer subsidies.

[zekevermillion]

Yes! If there was ever a case for trust-busting. Just noticed last night that Comcast is blocking some streaming apps that I use on my home PC. Certainly not the worst thing they do, but does remind me of how Standard Oil used to tie up rail capacity to keep it out of the hands of competitors.