[skipants]

> 2. Rogers/Shaw/Bell/Telus immediately offer better terms for the residents of that building.

I was about to write a whole comment about how I've never seen this myself and to disagree with you I was going to compare the price of Bell Fibre in my building to Beanfield. The latter of which I have at $50/mo at 1Gbps.

But then I loaded up Bell's availability page and entered my address... it was almost like a sick joke. The spinner was saying "Checking availability" or something like that. However, I could see the page with prices behind it darkened out while it was running. It was $115/mo for 2 years and $125/mo after that for 1Gbps fibre. But when the spinner was done and they "checked my availability"... well what do ya know! It's now magically $50/mo. Pretty disgusting that they can get away with that.

[xwolfi]

Man those prices, Ill use other currencies to be more precise, but in Paris, the 1Gbps was 30 euros and now that I live in Hong Kong it's 250 HKD. Canadian prices could be explained by the increasing cost with lower density, but damn, high speed dedicated fiber is still a luxury in some place, we forget, us dense cities' people.

Competition is not the only thing, in France we have 4 highly regulated fiber providers who must compete or pay fines, but in HK it's way more shady and we choose building and flats to get the best ones (cable is shit, former public telco is expensive, new kid is fast and cheap). It's still nowhere near your prices: a shit cable is 98HKD and an expensive HK Telecom is 500...

[ornornor]

The density argument is utter BS. A vast majority of the population is concentrated in 5 very dense cities, and no one is asking the incumbents to provide FTTH to every house in Nunavut.

It’s cartel behavior at its best. The Canadian telecom landscape is a sick joke.

[dmix]

The rural argument also never made sense because why not just start a nationalized ISP or subsidy that purely serves the rural north? Why sarcrifice the competitiveness of whole countries ISP market for a very small part of the country?

The same argument is used for keeping the postal service public when you could just subsidize the parts of the market that wouldn’t be self-sustaining rather than propping up the entire money-losing crown business. Burning tax dollars at the parcel delivery business in the age of e-commerce is a sad joke.

The whole “rural people are being protected” seems like a cover story for powerful friends of politicians to keep the money train rolling, and regular people eat it up on social media.

Plus Starlink et al has rendered the rural argument moot.

[ricardobayes]

Well in downtown Budapest 1Gbps is like 5 euros a month. There's no wonder why so many people become developers in Eastern Europe. Cheap and fast connectivity is key. The sooner western leadership realizes this the better.

[ChuckNorris89]

>the 1Gbps was 30 euros

That's still pretty good. In Austria that's 80 euros since telecoms here have the same government protected cartel as in Canada. And it's not even available in every building of the city, but you need to check before you move whether you have fiber or not in the building.

Similar in Germany.

One of the things I miss from Eastern Europe is the fast and cheap internet that's available in any building in the city.

[jacquesm]

You should check what an actual competitive market looks like, Bucharest for instance.

[FpUser]

I use 1Gbps symmetric Bell fiber small business package which includes static IP. Pay $129/month and generally happy. Static IP is important as I host some stuff right in my basement. You got me curious with this Beanfield. It is indeed $50 for 1Gbps symmetric (no static IP of course) but when I looked at their business package it is $300 for the same speed. Static IP is extra. I wonder what does such a big difference include.

[seizethegdgap]

You can use a Dynamic DNS service and a dynamic (residential) IP, unless downgrading to a dynamic IP incurs severe tradeoffs like CGNAT and/or blocking port 25.

[bshipp]

If i had to guess maybe it is a guaranteed 1Gps slot? It does seem like an excessive markup.

[bruce511]

"markup" is one way to price things, but not necessarily the best way.

A better way, and likely the thing in play here, is to price according to a mix of value provided, and the ability of the market to pay.

If you are spread enough this will result in some markets paying effectively a large markup, and done a much smaller markup, and some, potentially, less than cost.

The reason the package costs $300 is because that is what the market will bear, and the utility to the customer exceeds the value of that cash.

Incidentally that value may also be in support etc.

In summary, markup is one of the least effective pricing methodologies, and invariably leaves a lot of money on the table.

[Alupis]

Is this not just competition working the way it's supposed to?

ie, another player shows up in the market, offers a more attractive price and forces the other players to reduce their prices or shed customers.

It's not like Bell, in this case, were offering 1Gbps for something absurdly below cost, like $1/mo or something just to drive the new comer out of business.

Matching and lowering prices is good for everyone. The new player running out of money and going out of business is really just a lack of foresight and planning on their part. It's pretty absurd to not expect the incumbents to reduce pricing when they are directly completed against.

[horsawlarway]

I think the current answers to your questions are fairly inadequate - so I'm going to give you a more nuanced answer.

> Is this not just competition working the way it's supposed to?

Yes. This is competition working exactly as you would expect it to in a free market: One company is a dominant supplier, and they are able to match rates for a new entrant. They are able to out compete this new company, and they will do so - more marketing, lobbying, cost matching (or undercutting), etc. They have the ability to beat the competition, and they will.

So everything is going exactly as you'd expect - except the points from the parents comment still apply: the consumers in this market are actually getting fucked - the price drop will be temporary, the competitor will be forced out of business and leave, and the total infrastructure investment in the area will go down.

This is what's termed "Market failure". The free market here operates in a way that doesn't increase the well being of all (or even most) participants.

So yes - this is just competition playing out as we'd expect in a free market, but instead of doing what it normally does in an area (force infrastructure updates, service improvements, cost reductions, and higher efficiency as companies compete - all good things) it's doing bad things. Why?

Well - this case is the literal textbook definition of a "Natural monopoly". It turns out that when competition appears, Bell is able to outcompete them not by actually improving, but by leveraging existing infrastructure and scale in a way that the startup company cannot.

The free market isn't making Bell better - they're not having to work any harder or improve. That's great for Bell, but pretty bad for everybody else.

So (at least in theory) we regulate this case of the free market, because we've seen that "normal competition" doesn't actually work here.

[amirkdv]

> forces the other players to reduce their prices or shed customers.

Excpet they revert back to old prices once the competition is dead. This is textbook predatory pricing.

> It's not like Bell, in this case, were offering 1Gbps for something absurdly below cost, like $1/mo or something just to drive the new comer out of business.

What's the significance of "absurdly below cost" here? They are doing exactly what you describe except the exact number here is not 1 but 50.

[djbebs]

No, its just basic supply and demand...

[shkkmo]

When you price good below your production costs and have most of the market, then that is considered anticompetitive, monopolist behavior and is illegal in many places.

This is because if a large enough company does this, they can lower their prices locally to below cost whenever a new company enters a local market and subsidize this with their other markets. This creates a stranglehold on the market that can allow a company to charge artificially high prices for sub-par services.

This isn't just theory there is a well established pattern here and that is why laws prohibit it in many places.

[richbell]

> Is this not just competition working the way it's supposed to? > > ie, another player shows up in the market, offers a more attractive price and forces the other players to reduce their prices or shed customers.

No, because any time a company shows up that could pose an actual challenge to their stranglehold, all 3 companies gang up and lobby against them.

E.g.

https://globalnews.ca/news/753408/new-ad-against-verizon-exp...

https://www.iphoneincanada.ca/carriers/rogers-telus-bell-job...

[Gare]

> t's pretty absurd to not expect the incumbents to reduce pricing when they are directly completed against.

But they should be forced to reduce it everywhere where they're offering similar service, not just a limited local area.