[_bxg1]

I would say the strongest example is wired telecom, which may not be a national monopoly but is certainly a local monopoly across nearly the whole country. The way the companies divvy up territory to avoid competition is probably what keeps U.S. prices so much higher than, say, Europe. I wonder if a case could be made for it being a cartel.

But yes, cellular and satellite providers have started to provide a saving grace of disruption in that market. We'll see if it ends up being enough.

[treis]

Look at profit margins though. Apple and Facebook are consistently 30%+ and Google is 20%+. Verizon, Comcast, and the rest of the telecoms are in the low to mid teens or worse. That's pretty close to the S&P 500 average margin.

So while it appears that wired telecom is a monopoly they don't make money like monopolies. Compare Google Fiber with Google Plus. Google had people literally begging them to put Fiber in but backed off because they couldn't make (enough) money. Plus was a hugely important project for them but they canceled it because they couldn't beat Facebook.

We've seen major tech companies take aim at the monopoly/duopoly product of a rival and they've all failed:

Microsoft poured billions into Bing, Maps and mobile for little market share

Google couldn't dent Facebook with Plus

Amazon and Facebook's phones fell flat

[notsureigetit]

> Google had people literally begging them to put Fiber in but backed off because they couldn't make (enough) money.

Was that the reason, or was it because the other telecom companies were lobbying to keep Google from accessing rights of way and expanding to other cities. (One failed example:[0])

In many jurisdictions, the cable and telecom companies are attempting to make it illegal for municipalities to install their own government-run internet because they really don't want to compete. It's ridiculous. [1]

Had Google been allowed to compete like in other industries, they probably would have crushed the telecom companies. But they weren't allowed to.

[0] https://en.wikipedia.org/wiki/Google_Fiber#Reactions [1] https://arstechnica.com/tech-policy/2017/10/another-state-la...

[treis]

>Was that the reason,

Yes.

> or was it because the other telecom companies were lobbying to keep Google from accessing rights of way and expanding to other cities. (One failed example:[0])

A failed lobbying example is terrible evidence compared to the sweetheart deals Google got and the lengths cities went to attract Google (from Wikipedia):

The initial location was chosen following a competitive selection process.[18] Over 1,100 communities applied to be the first recipient of the service.[19][20] Google originally stated that they would announce the winner or winners by the end of 2010; however, in mid-December, Google pushed back the announcement to "early 2011" due to the number of applications.[21][22][23]

The request form was simple, and, some have argued, too straightforward.[24] This led to various attention-getting behaviors by those hoping to have their town selected.[24] Some examples are given below:

Baton Rouge, Louisiana supporters remade the Supertramp song "Give a Little Bit" to "Give a Gigabit".

Greenville, South Carolina utilized 1,000 of their citizens and glow sticks to create "The World's First and Largest People-Powered Google Chain."[25] From an aerial view, the title "Google" was colorfully visible.

Topeka, Kansas, temporarily renamed itself "Google".

A small plane bearing a banner reading "Will Google Play in Peoria, IL?" flew over the Google campus in Mountain View, California.[26]

The mayor of Duluth, Minnesota, jokingly proclaimed that every first-born child will be named either Google Fiber or Googlette Fiber.[27]

The city of Rancho Cucamonga, California, dubbed their city, "Rancho Googlemonga".[28]

One of the islands in Sarasota, Florida, was temporarily renamed "Google Island".[24]

Municipalities and citizens have also uploaded YouTube videos to support their bids. Some examples:

A YouTube video in support of Sarasota, Florida, used the Bobby McFerrin song "Don't Worry, Be Happy".[24] A video for Sarasota was uploaded through Facebook’s video service.[24]

Comedian and United States Senator Al Franken made a YouTube video to support the bid of Duluth, Minnesota.[29]

Ann Arbor, Michigan, has its own YouTube channel[30] featuring a David Letterman-style Top Ten list delivered by town VIPs such as Mayor John Hieftje and University of Michigan President Mary Sue Coleman. Ann Arbor also held a city-wide GoogleFest,[31] kicking off with a gathering of hundreds of participants dancing and chanting "Ann Arbor Google Fiber, ain't Nothing any finer."[32]

[verall]

Yes, and I'm sure if I could and it would get me a competent ISP I would climb a skyscraper and do headspins on top. Local municipalities have given sweetheart deals to basically everyone that agreed to lay cable. This difference is that in the couple years Google was an ISP they didn't pull any obvious bullshit [yet] on their customers like other ISPS.

It seems pretty clear to me that ISP is like landlord - they need to either be nonprofit or it is a matter of time until whoever is in charge discovers or is replaced by someone who knows that most of the customers are pretty darn stuck and can be shaken for loose change.

I feel like the fact that cities are willing to kowtow to google for Please God Any Alternative To Our Isp Overlords is evidence that the ISPs are doing something that is particularly bad and most small governments are powerless to stop it.

[monocasa]

All those examples are cool, but how do they practically solve the base issues that Google ran into wrt to right of way and easements.

All of those examples are the kind of thing that municipalities do because it's easy and doesn't actually address any of the base issues.

[treis]

>But the key thing was that city officials promised to get out of the media giant's way. They didn't dangle tax breaks, but they did deliver access to public rights of way, expedite the permiting process, offer space in city facilities and provide assistance with marketing and public relations.

https://www.forbes.com/sites/eliseackerman/2012/08/04/how-ka...

Provo sold them their fiber network for $1 as another example. Every city that got Google Fiber gave up concessions and promised to help Google expedite construction.

[creato]

> Verizon, Comcast, and the rest of the telecoms are in the low to mid teens or worse. That's pretty close to the S&P 500 average margin.

I would want to see the margins for just operating high speed internet service. I suspect their overall margins are lower because their financial picture is clouded by things like cable TV and content costs. A big reason why telecoms suck is precisely because if you just want high speed internet, they force you to buy all their bullshit content as well (for me, it's cheaper to buy internet + cable TV than just internet!), and they make it hard to buy that content any other way. The main action I'd like to see taken against telecoms is to force them to spin off their content businesses (and they never should have been allowed to buy them in the first place).

[rayiner]

The opposite is true. Video service enables companies to charge enough to justify broadband deployment. That’s why Google and Verizon offer video over their fiber service even though they don’t really have their own content. Verizon won’t expand FiOS into Baltimore because it can’t get a television franchise from the city without agreeing to onerous build-out requirements. Without video revenues FiOS isn’t really viable.

[creato]

Google Fiber charged $70/mo for internet, and $130/mo for cable TV [1]. Standalone TV streaming services are also around $50/mo (e.g. hulu [2], youtube live TV packages [3]).

Something doesn't add up. If it costs $50/mo to get cable TV content, why does it cost me $-10/mo with comcast?

1. https://www.tennessean.com/story/money/tech/2016/04/11/googl...

2. https://www.hulu.com/live-tv

3. https://tv.youtube.com

[_bxg1]

That may have been true at one point, but cable is on its last leg now. And streaming services (for now) go over all networks.

[treis]

>I would want to see the margins for just operating high speed internet service

You can't really break it out that way. The TV service and internet service use the same physical wire. That's a fixed cost per household and once you have it, it's only marginally more expensive to send TV with the internet. Double so since people without cable packages tend to replace them with streaming services.

[creato]

> That's a fixed cost per household and once you have it, it's only marginally more expensive to send TV with the internet.

That values the content at near zero, which I think is not correct, and part of the game telecoms are playing with their (local) monopoly pricing power.

[buddylw]

Why do profit margins matter at all here? It's only a signal that there is a problem if margins are very high because there is no guarantee that an entrenched monopolistic company will be efficient or make a strong profit.

If you want to do a comparison compare consumer internet cost vs performance to places with a healthy and regulated market for internet service.

Also, by this logic Amazon could never be regulated. It doesn't make sense.

[treis]

>Why do profit margins matter at all here? It's only a signal that there is a problem if margins are very high because there is no guarantee that an entrenched monopolistic company will be efficient or make a strong profit.

If they were really wasting ~20% of their revenue someone would buy them or do a hostile takeover.

[AngryData]

Unless they are spending most of that "wasted' money on capturing markets and paying legal firms to stomp out any potential competition. Or the constant advertising campaigns for services that me and many others have never had access to. I see comcast commercials every day, ive never lived in an area with comcast available. Just because they aren't making huge profits doesn't means they are spending that money on providing services.

Why risk innovation when stomping out competition is much more straight forward and predictable?

[treis]

Do you have any numbers showing that any of these companies spend somewhere in the neighborhood of 20% of their revenues on capturing markets and legal firms?

[mjevans]

If they are in a low competition (natural monopoly) market, maybe open books on where the money is going should be a regulatory requirement.

[xadhominemx]

the wireline operators are mature companies, amazon is investing heavily in growth. this is an obvious distinction. courts and regulators constantly apply this sort of informed judgment and nuance to their analyses because it's required for their jobs.

[buddylw]

I agree there are big differences between these ISPs and Amazon. I was just making the point that Amazon's lack of a profit wouldn't exempt it from these regulations either. Profit is as much a bookkeeping/tax/business policy as it is an actual market signal.

[treis]

You can only fake it to a certain extent since you report cash flow. Even for cash flow from operating activities Google (35%), Apple (30%), and Facebook (52%!) outshone Comcast (25%).