> forcing the cable companies to be dumb pipes and somehow figuring out how that will still incentivize anyone to build out infrastructure
That is just a talking point. What do you think happens with the power company in a growing city? If there is going to be twice as much consumption of electricity as there was last year then the power company has to upgrade the distribution infrastructure. They manage to do it without needing the "incentive" of controlling which brands of washer and dryer you can plug into the mains.
If you're going to have a regulated utility then you don't need market incentives (which barely exist in uncompetitive markets like last mile anyway) because you have regulations requiring them to do it. Either they offer speeds which are e.g. 50% faster than the median speed in first world countries or they face penalties worse than the cost of the upgrade.
Power companies are a terrible model, first because most upgrades to power systems happen on a scale of decades, second because power generation has been a disaster in many growing parts of the country like California or Texas, third because the politics and capture surrounding utility regulation are worse than those in telecom, and fourth because the regulated utilities do have incentives to invest in upgrades, like guaranteed rates of return, and such incentives have had decidedly mixed results.
You can't force private companies to build out a network on unattractive terms. They'll just exit the business and take their capital elsewhere. See the difficulty municipalities have had trying to get companies to build out fiber on ridiculous tarms.
The model of regulated utilities has largely been a disaster. If you want public infrastructure, build it with public money, like we do roads. But the problem with that approach is you'll quickly realize ordinary people don't want to spend as much money on all this as the techies do.
> You can't force private companies to build out a network on unattractive terms. They'll just exit the business and take their capital elsewhere. See the difficulty municipalities have had trying to get companies to build out fiber on ridiculous tarms.
Why do the terms have to be ridiculous? What's wrong with offering 10Mbps service for one price and 1000Mbps service for a higher price that reasonably takes into account the capital investment that went into being able to deliver it?
> If you want public infrastructure, build it with public money, like we do roads.
OK sure, all we have to do is make the incumbent ISPs stop damaging any attempt to do such a thing through lobbying and litigation. Easier said than done.
> But the problem with that approach is you'll quickly realize ordinary people don't want to spend as much money on all this as the techies do.
If Comcast can turn a large profit then there is no reason a municipal ISP couldn't break even without consuming any tax dollars. Pay for the initial roll out with a bond issue and then repay the bond over time from subscription fees.
> Why do the terms have to be ridiculous? What's wrong with offering 10Mbps service for one price and 1000Mbps service for a higher price that reasonably takes into account the capital investment that went into being able to deliver it?
Politics forces the terms to be ridiculous. Most U.S. cities are political battlegrounds for socioeconomic and racial conflict. Say you were trying to build fiber in Chicago. What would a private company do? They'd start in the Loop, and build along north Lake Michigan going through the dense upper middle class neighborhoods. In a city bitterly divided by racial and economic conflict, such a project would never fly. So you'd end up building infrastructure through the whole city. These "build out" requirements are a basic part of nearly all the terms municipalities impose on companies. Okay, once you do that, what do you charge? It doesn't cost much less to build slow service than fast service, if you're starting fresh with a fiber network. How much do you charge in all those poor neighborhoods the city forced you to build out to? Can you charge enough to the richer folks to recoup your capital investment in the unprofitable parts of the network, bearing in mind that the more expensive you make it, the more people will just stay with the basic tier? Especially if the basic tier is as fast as 10 Mbps, high enough for 95% of users.
> OK sure, all we have to do is make the incumbent ISPs stop damaging any attempt to do such a thing through lobbying and litigation. Easier said than done.
People lean on this trope too much. It wasn't Comcast that tanked FIOS in Wilmington, it was the city. LA can't get any takers for its municipal fiber project. The ISP's weren't able to stall Google fiber in the cities that were willing to make the requisite regulatory concessions to Google. People have this idea that companies are chomping at the bit to build fiber, and would but for ISP and cable lobbying. This is a fantasy. Companies aren't building fiber because there isn't enough money in it under existing regulatory regimes.
> If Comcast can turn a large profit then there is no reason a municipal ISP couldn't break even without consuming any tax dollars. Pay for the initial roll out with a bond issue and then repay the bond over time from subscription fees.
The states and cities are totally bankrupt. Their credit ratings are in the shitter, and almost all are facing unclosable budget gaps due to pension and healthcare obligations. Limited funds are available just to keel core infrastructure, like bridges, from crumbling. Issuing hundreds of millions in bonds for fiber is utterly untenable.
Not to mention, as shitty as Comcast's service is, do you want your municipality as your ISP? Most can't even get busses to run on time, and only manage to supply power and water because that infrastructure was built before their governments became broken.
That seems like a strong candidate for pricing that reflects the realities of the market: Make the monthly fee include a line item for the cost of installing fiber on your street amortized over the first few years and divided by the number of subscribers on your street who have committed to a multi-year contract. A street gets fiber as soon as someone signs up, but they have to commit to a very large bill if they're the only one. Let people sign up contingent on that price falling below some threshold. That way you get universal service availability but no customers are unprofitable. Then if the city wants to help the poor it can subsidize their fee which doubles your bang for the buck because the lower price creates more sign ups which lowers the unit cost.
> Companies aren't building fiber because there isn't enough money in it under existing regulatory regimes.
That's the whole point of municipal fiber -- to have the municipality front the capital so you don't have to cater to private interests.
> The states and cities are totally bankrupt.
Not all cities are as broken as Chicago or Detroit.
> That seems like a strong candidate for pricing that reflects the realities of the market: Make the monthly fee include a line item for the cost of installing fiber on your street amortized over the first few years and divided by the number of subscribers on your street who have committed to a multi-year contract.
We're talking about local politics. You don't get to consider the realities of the market, just the realities of the political situation. In Philadelphia, Comcast offers basic cable for something like $13/month. That almost certainly doesn't reflect the market cost, and they don't do it out of the kindness of their hearts, they do it as a precondition for their license.
> Then if the city wants to help the poor it can subsidize their fee which doubles your bang for the buck because the lower price creates more sign ups which lowers the unit cost.
Cities don't like to spend their own money subsidizing poor and high cost people. They prefer cross-subsidies, so that people don't see the money on their tax bill. That's how we got the cable franchises in the first place--cities offered exclusive monopolies as a carrot for building out networks and offering cheap basic service.
In New York, fiber rollout has become an economic justice/civil rights issue, complete with demagoguery ("'If you can't afford to feed your family by the end of the month, you can't afford $75 a month for the broadband service,' she said. 'And that's what we have to fix.'").
> Not all cities are as broken as Chicago or Detroit.
> We're talking about local politics. You don't get to consider the realities of the market, just the realities of the political situation.
It seems like your argument is not that good policies don't exist but rather that people are too stubborn, apathetic or corrupt for them to be enacted. But that isn't a policy argument, it's a self-fulfilling prophecy.
> Every city on that list besides Milwaukee and Washington, D.C. has an underfunded pension plan.
That doesn't mean they're bankrupt, it just means they're going to have to reduce spending or raise taxes (or run a deficit). And a municipal fiber project is self-funding through subscription fees. All the city's finances are relevant to is the interest rate paid on the bonds.
That is just a talking point. What do you think happens with the power company in a growing city? If there is going to be twice as much consumption of electricity as there was last year then the power company has to upgrade the distribution infrastructure. They manage to do it without needing the "incentive" of controlling which brands of washer and dryer you can plug into the mains.
If you're going to have a regulated utility then you don't need market incentives (which barely exist in uncompetitive markets like last mile anyway) because you have regulations requiring them to do it. Either they offer speeds which are e.g. 50% faster than the median speed in first world countries or they face penalties worse than the cost of the upgrade.