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by ascotan 72 days ago
The real reason for the “cartels” in the US is because of the cost of infrastructure versus the subscribers cost. Because the United States is so large there are only a few companies that can create the infrastructure required to service large area areas with fiber.

So companies that have the ability to lay down, fiber do so in necessary cooperation with other providers to create a large patchwork across the country. This means that network companies have to cooperate with each other to send traffic back-and-forth.

It’s not realistic or feasible to have the US government generate a fiber optic connectivity for the entirety of every household in the United States. In fact, the free market was the only realistic possible to deliver this.

4 comments

> The real reason for the “cartels” in the US is because of the cost of infrastructure versus the subscribers cost. Because the United States is so large there are only a few companies that can create the infrastructure required to service large area areas with fiber.

The "US is large" argument is non-sense. 40% of the US population lives in a coastal county:

* https://coast.noaa.gov/states/fast-facts/economics-and-demog...

And two-thirds of the population lives with-in 100 miles of the border:

* https://www.aclu.org/news/immigrants-rights/your-rights-bord...

The US population is fairly concentrated.

And even if it wasn't, looking at history, the US managed to bring electrical cables to just about every household in the country, and later telephone cables. If those two things could be done in the 1900s, why can't fibre be done in the 2000s?

> the US managed to bring electrical cables to just about every household in the country

We had to pass acts of congress to pay for last mile electrical infrastructure for those who were truly out in the boonies and poor.

https://en.wikipedia.org/wiki/Rural_Electrification_Act

We paid a shitload of money to various ISPs to do exactly the same thing for internet, multiple times, and then just let them.... not.

"It’s not realistic or feasible to have the US government generate a fiber optic connectivity for the entirety of every household in the United States. In fact, the free market was the only realistic possible to deliver this."

Why? Other countries with similar population densities have done it. A bigger country should have an advantage due to economies of scale.

I think he means it's not economic viable to the companies, however as you can see the Swiss model was defined by politics.

Even though, I agree with you it's possible, in my city the internet only got better when a monopoly was broken, and a state company decide to work in a new infrastructure, all FTTH, now I pay less than 100BRL for 300/150Mbps with that price 10 years ago it was only possible ADSL connections (25Mbps).

Now every major provider do have FTTH infra with great prices.

Which countries? Density matters but raw volume matters too.
> It’s not realistic or feasible to have the US government generate a fiber optic connectivity for the entirety of every household in the United States. In fact, the free market was the only realistic possible to deliver this.

They managed for water and wastewater, which are a lot more complex than fiber.

Electric is probably a better example, >20% of the US is on septic systems for their wastewater.
This is just pure nonsense. The only reason for "cartels" is regulatory capture.

Most of the cost of an ISP is the so-called "last mile". Depending on your locale this is usually either stringing up cables on existing telephone poles or digging trenches, typically in the setback area between the road and the sidewalk that you might maintain but you don't technically own (or the municipality maintains an easement on, it varies).

Once you go from the premises to a central POP, the costs basically go to zero (per install). Backhaul bandwidth for a residential ISP is incredibly cheap, even free with peering arrangements.

The point is that geography really doesn't matter. Wiring up a 10,000 homes in Phoenix, Zurich, Shanghai or Sydney is basically the same (normalized for labor costs). The US is very spread out due to geography. It doesn't matter. The links between towns are a small fraction of the cost and often covered by existing rights-of-way anyway (eg railroads). You compare that to a highly urbanized and concentrated population like Australia where urban density is very similar to many American towns and cities and you're dealing with a very similar cost structure.

Think about it this way: if geography was the issue and not, say, artificial barriers to prevent competition (including from municipal broadband), why would the ISP lobby spend so much moeny to make municipal broadband illegal (as they do in many states)? Or why would they formalize a monopoly into a contract with an "exclusivity" deal (ie franchise agreement)?