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Why is European broadband faster and cheaper? Blame the government

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Re: Why is European broadband faster and cheaper? Blame the government

#61

Post by Apocryphon »

When Black was named Telecommunications Adjudicator in 2004, he fought on two fronts to break the BT logjam. First, he used his own experience as a former employee of the telecom giant to push for change from the inside. When that wasn't enough, he used the bully pulpit provided by his government post to embarrass BT in public. He publicized the company's failure to meet goals. Reporters loved the story of the government regulator holding the giant firm's feet to the fire.

I wonder if there are similar tales in the U.S. of the brave little bureaucrat against the hulking titan of industry. Seems rather countercultural.

Re: Why is European broadband faster and cheaper? Blame the government

#62

Post by jules »

krschultz wrote: post #33
VMG wrote: post #10

Earlier quoted context omitted.

... after creating monopolies in the first place

The logic there is astounding. The government broke up AT&T into a bunch of little companies. These companies then merged their way back into a handful of large corporations and are still trying to merge even more. Did the government force them to join up together? Of course not. The government is actively discouraging a lot of these mergers, i.e. the government is forcing there to be a more competitive marketplace.

That doesn't really explain the difference though. The one Dutch telephone company used to be state owned. Now we have multiple competing telephone/tv/internet companies.

Re: Why is European broadband faster and cheaper? Blame the government

#63

Post by masklinn »

Perceval wrote: post #46
krschultz wrote: post #33

Earlier quoted context omitted.

The logic there is astounding. The government broke up AT&T into a bunch of little companies. These companies then merged their way back into a handful of large corporations and are still trying to merge even more. Did the government force them to join up together? Of course not. The government is actively discouraging a lot of these mergers, i.e. the government is forcing there to be a more competitive marketplace.

The original AT&T was made into a national monopoly by U.S. government regulation: http://en.wikipedia.org/wiki/American_Telephone_%26_Telegrap... Likewise, in many European countries, telecoms were originally national monopolies. Both in Europe and in the United States those national monopolies were either broken up or subjected to more competition. VMG is quite correct to point out that telecoms gained monopoly sta…

There are two differences (though I don't think they're very important):

* In Europe, it was generally an artificial monopoly through a state company, Ma Bell was a natural monopoly sanctioned by the federal government.

* Where Ma Bell was broken up following an antitrust case, most european monopolies were simply privatized along with new regulations (or deregulations depending on the market) forcing them to open up their market (instead of turtling)

Re: Why is European broadband faster and cheaper? Blame the government

#64

Post by pyre »

maxharris wrote: post #51

Here's why: population density is much higher in Europe. The price per mile to put cables into the ground has a lower bound that cannot be breached. The same length of cable will connect far more customers in high-population areas than it will in rural Wyoming. It is not valid to compare Europe with the USA in this regard because they truly are apples and oranges geographically. I assert that broadband would be faste…

  > population density is much higher in Europe.
If this is really the case, then:

* Why do FIOS rollouts happen in the suburbs rather than in the densely packed cities? Wouldn't it be cheaper to roll out in the city since the suburbs are less dense than the cities that they cling to?

* Why don't we have excellent broadband on the US East coast where the population density is comparable to Europe?

  > far more customers in high-population areas than it
  > will in rural Wyoming
That's really the point. There are areas of high population density in the US, but the broadband options, even in those areas are sometimes lacking (especially when the ISPs oversell their bandwidth in high-population areas rather than upgrading to deal with the additional load).

Re: Why is European broadband faster and cheaper? Blame the government

#65

Post by seabee »

arecibodrake wrote: post #54

The only reason we don't have most metropolitan areas with gigabit fiber to the door is almost entirely teleco/cable easements. The day you stop government from mandating one company per area or delimiting it to a small few monopolistic entities and allow a free market is the day we stop dealing with the hell that is becoming us. The answer is quite simply LESS government, dammit.

That clearly isn't the answer, as the article spends many paragraphs explaining.

The answer is "do things that encourage competition and investment". The US government fails at this, but it is neither a limitation of government per se or easily achieved by private enterprise alone.

Re: Why is European broadband faster and cheaper? Blame the government

#66

Post by arecibodrake »

Apocryphon wrote: post #47
afterburner wrote: post #32

Free markets need government regulation in order to create competitive environments where the customer is served best. (The "blame the government" in the title refers to blaming the US government for not creating those conditions, and crediting the European governments for doing so.)

I think it's a clever, ironic use of blaming the government- in the U.S., big government is always seen as an impediment and to be dreaded, but the problem is not for meddling bureaucrats, but hands-off ones who allow corporations free rein.

You mean the governments that constrain through force the market so that only a few monopolistic entities are present?

Re: Why is European broadband faster and cheaper? Blame the government

#67

Post by masklinn »

maxharris wrote: post #60
logjam wrote: post #39

Earlier quoted context omitted.

>... after creating monopolies in the first place If you are really trying to advance the theory that "the market", left to itself, won't generate monopoly after monopoly, perhaps you could point us to actual examples of those golden times when the absence of regulation served consumers more than they served business oligarchy.

Properly speaking, the concept "monopoly" properly pertains only to situations where the government enforces the monopoly. This is the original meaning of the word (before it was altered in the 19th and 20th centuries). There is no proper political right for a "consumer" to have a choice between multiple brands of a product. If there were such a right, it would be violated the moment they walked into a remote store t…

> This is the original meaning of the word (before it was altered in the 19th and 20th centuries).

Considering the origins of the word (monopōlion, from monos "single" and pōlein "sell."), that does not feel correct.

While there were a number of de-jure monopolies (English and Dutch East India companies in the 17th century for instance) the origin of the word comes from a natural monopoly (of olive presses).

Re: Why is European broadband faster and cheaper? Blame the government

#68

Post by maxharris »

Apocryphon wrote: post #55
maxharris wrote: post #51

Here's why: population density is much higher in Europe. The price per mile to put cables into the ground has a lower bound that cannot be breached. The same length of cable will connect far more customers in high-population areas than it will in rural Wyoming. It is not valid to compare Europe with the USA in this regard because they truly are apples and oranges geographically. I assert that broadband would be faste…

The article actually mentions that point: Meanwhile, the size of the U.S. may be a red herring. Most of the region between Boston and Washington is as densely populated as most of Europe and the UK. So is the California coast between San Francisco and San Diego. And so is the region of the Midwest centered on Chicago. Those areas are home to about a quarter of all Americans. In other words, we live in a big country,…

I don't buy that. One reason is that the article fails to account for the taxes that are put on phone bills that subsidize rural telecommunications. Another is that the regulations that force American telcos to support low-density projects have direct effects (someone subsidizes folks in Wyoming, and that invariably ends up being people living elsewhere) as well as indirect ones (regulating a business changes its culture for the worse. Risk takers get pushed out.)

Re: Why is European broadband faster and cheaper? Blame the government

#69

Post by Apocryphon »

arecibodrake wrote: post #66
Apocryphon wrote: post #47

Earlier quoted context omitted.

I think it's a clever, ironic use of blaming the government- in the U.S., big government is always seen as an impediment and to be dreaded, but the problem is not for meddling bureaucrats, but hands-off ones who allow corporations free rein.

You mean the governments that constrain through force the market so that only a few monopolistic entities are present?

The problem is caused by bad government, but the solution is good government, as exemplified by the BT story. A completely free market would lead to a monopoly in broadband anyways. The irony here is that the government is not doing anything to solve the problem.

Re: Why is European broadband faster and cheaper? Blame the government

#70

Post by russell »

w1ntermute wrote: post #44
masklinn wrote: post #40

Earlier quoted context omitted.

> In the US, if I'm not mistaken, most of the phone companies were and are at least somewhat private entities that invested private money in putting in the lines Most of the phone companies were Ma Bell, which had a government-sanctioned natural monopoly from 1936 to its breakup in 1984.

> Most of the phone companies were Ma Bell, which had a government-sanctioned natural monopoly from 1936 to its breakup in 1984. If it was natural, why was a government sanction necessary?

Why government regulation? To prevent price gouging, favoritism to particular customers, killing off rivals. Prior to the Carterphone Decision you could not attach any third party equipment to the phone lines, including phones and modems. There was a huge battle for MCI to attach their long distance phone lines to the AT&T system. Common carrier status was invented to allow people to use their phones as they wish. When I was a child coast to coast phone calss were several dollars a minute. Now unlimited long distance is the price of a single call of the past.

(I realize that I answered the question "Why is regulation necessary?", but it goes along with the sanction.)

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