Telecoms oftentimes make deals with the government - in exchange for some sort of advantage, they agree to provide a certain level of service. Linked from the article:
Verizon predecessor New Jersey Bell agreed to the statewide broadband buildout in a 1993 agreement with the state. In exchange for a different form of price regulation that would allow the company to make more money, "Verizon agreed to upgrade its network to provide broadband to every Verizon New Jersey business and residential customer, school, and library for 100 percent of its service territory," according to the state's Division of Rate Counsel.
From the Article:
"Verizon predecessor New Jersey Bell committed to a statewide broadband buildout in a 1993 agreement with state authorities in exchange for a price regulation overhaul that the telco requested."
I assume part of the takeover/merger that happened also merged the previous responsibilities.
One thing to consider is it is unlikely that a 1993 agreement included a provision for a fiber to residential home requirement.
It's probably a requirement for building fiber to commercial or government locations if a customer is willing to pay. Stuff that Telecom's do, it's just very expensive.
"In a spirited demonstration of the obsolescence of the microwave networks operated by AT&T and MCI, US Sprint blew up one of the last of its own microwave towers in February 1988."
I remember seeing a print add at the time with a picture of the controlled demolition in progress.
I would agree; however, Verizon has reneged on this agreement a few times. There are several "donut" towns in New Jersey where Verizon was explicitly mandated to serve FTTH but never bothered to (and seem to have been all but forgotten by local lawmakers).
In the US, many telecoms operate as a legal monopoly. In exchange for a more or lesscaptive market, telecoms are legally obligated to maintain certain levels of service, among other things - such as rolling out upgrades.
This is supposed to provide a higher level of service to the consumer/citizen of the area that makes the agreement, while also meaning telecoms don't waste their massive upfront costs by having no customers. It's supposed to provide the same impetus to improve service as competition. In practice, you get this kind of nonsense.
It's not quite so simple. The whole point of the 1996 Telecom Act was to get rid of the legal monopolies and get the government out of the business of regulating them. What we have now are incumbents not monopolists. However, in a low-margin industry (Verizon's wireline operating margin is 2-5%) with enormous capital costs, that's kind of a theoretical distinction.
They own the copper runs. But if you want to compete with them by building your own infrastructure you're allowed to do that. In most places, it's the power companies that own the utility lines, not the telcos. The problem is it's not worth anybody's while to do it to earn 3-5% return.
A monopoly doesn't require that other people be legally prohibited from competing (if they are, that's a granted-by-law monopoly), it requires that you have sufficient dominance in some market as to exercise pricing power within that market.
Don't know the actual contracts here but the notion that a telecom firm has obligations to a government body is hardly surprising.
Telecom providers work with government bodies to place and access poles via eminent domain. Even with cellphones similar considerations exist for the placement of towers. Providers can work directly with private landowners but performing all such negotiations individually is not feasible.
Thus in exchange for the State of New Jersey supporting Verizon there are complimentary obligations for Verizon in return.
or we could you know, just have many ISP's instead of just a few big ones. Not that i'm against a different topology, but breaking them up is easier to ask for / implement.
The solution to this problem is extremely simple. Government runs the last mile fiber to EVERY home. Then* pull it back to a central location and let ISPs compete for service there where the barrier to entry isn't billions of dollars.
I'm pretty sure the government can and does tap any line they want. If you think a private company owning the last mile somehow makes you more secure than if the government did, you're being extremely naive.
Well, I was less worried about the lines and more worried about the described centralized clearinghouses.
That said, although obviously the government can show up with guns wherever they want and tap whatever they want, I suspect the legal situation would be much different if we're looking at government-owned infrastructure vs. privately owned infrastructure.
If we can provide a mesh network that is as effective as older topologies but cheaper, the problem is solved, period.
If we break up ISPs into smaller ISPs, then we have to maintain that solution, as giant companies are constantly lobbying government to allow them to re-establish monopolistic practices. History tells us anti-monopolistic policies don't last. The split and re-merging of phone companies happened in under a decade. Glass-Steagall worked for a long time, but finally died.
I have no argument that there are major technical hurdles to clear before we can have mesh networks, but once those hurdles are cleared, the power is decentralized into the hands of individuals. Individuals can join together to force through legislation, but the power remains centralized in government, and maintaining that is extremely difficult.
To be clear, I give money to the EFF and I've called my congressmen on issues like net neutrality: I don't mean to downplay the importance of these efforts. But these are temporary solutions, workarounds to the problem, rather than solutions.
I'd be interested in trying it, and it might be great for otherwise-expensive "last-mile" situations, but...
I play video games, and I can't imagine what the latency would be like over a mesh network. So many hops, so many pieces of questionable cheap home hardware handling my data...
There is an interesting way to make this work, inspired by "skip-list" data structure. Suppose you sell network radio gear. You want your customers to have a tree network instead of a mesh network to reduce the number of hops. So sell a random distribution of stations: most customers get short-range stations. Some get longer range stations. Some lucky few get very long range high capacity stations.
You will end up with a random geographic distribution of radios with different capabilities. The number of network hops will be reduced because, as with skip lists, you find a path to high capacity station, then skip longs distances, then find the final recipient.
In practice this would be difficult to deploy (Can you legally give high power stations? What about RF safety of higher power stations?), but I think the idea is neat.
> I play video games, and I can't imagine what the latency would be like over a mesh network.
1. Neither can anyone, because we don't have examples of large-scale usage of mesh networks, and the amount of research that has gone into mesh networks is nowhere near as extensive as exists with ISPs. There's no reason to assume that mesh networks will always have higher latency, especially in places where i.e. Comcast is choking connections.
2. The small-scale mesh networks which already exist are demonstrably adequate for many, many use-cases. Mesh networks which handle text and image web browsing, email, instant messaging, are still extremely useful even if they have trouble handling streaming video and video games.
Free market competition is usually the best solution to problems like this. Google and others are on the horizon offering better connectivity already. If Verizon doesn't fix its problems then they will start to lose customers which is the ultimate market pressure. While Government-led solutions often seem superior in theory, they rarely work out that way in real life. Government's most effective role, in my opinion, is to create a regulatory environment that encourages consumer transparency, corporate accountability and free market competition. One example of this is what is happening in the health care market (intentionally or not) with the move to high deductible health care plans. These plans incentivize consumers to individually comparison shop fee-for-service medical services for the first time. There is no reason to pay $1,500 for an MRI when there is another place across town willing to do it for $500. This type of mass optimization on a micro economic scale will likely result in better access to services at lower price points than, for example, the Government (CMS) negotiating a universal rate card with low, fixed copays for all patients, all providers, and all services.
Yeah, except many (most in my area) healthcare providers do not have fixed rates for service, and prices that are offered are often just estimates, with no real recourse if the estimate is off by a wide margin.
My wife had elective surgery- I had a high deductible plan at the time with an HSA account. When we asked what the total cost would be, the quote was ~$1100. The total bills that came to us were well over three times that. There is no real recourse for this, we wrote letters, called governing agencies in our area and were nearly sent to collections before I just paid for it.
Free market capitalism is far from what we have in almost every service-based industry in my experience, and companies fight tooth and nail to ensure it stays that way.
When we asked what the total cost would be, the quote was ~$1100. The total bills that came to us were well over three times that.
That sounds like an opportunity, no? If I were a hospital, I'd start providing cost guarantees to my patients and their insurers.
In fact, some of that is already starting to happen with capitated payment systems. Instead of paying for each procedure, a hospitals get a fixed amount per patient per year. If they can keep costs low, they keep the difference. If they can't, they take a loss.
It's important to remember a lot of healthcare providers are hamstrung by current regulations as well. Even just to start a new hospital, you need to get a "certificate of need" from your state.
With the advent of high deductible plans, there is a ton of incentive for patients. If your deductible is $5,000, every dollar you save on medical costs is money in your pocket. They are becoming more and more common.
> While Government-led solutions often seem superior in theory, they rarely work out that way in real life.
Same for free-market solutions, especially in an industry with enormous barriers to entry like the telecom world.
> There is no reason to pay $1,500 for an MRI when there is another place across town willing to do it for $500.
Good luck getting a quote for a medical procedure in the US. Hospitals frequently can't tell if you if insurance will even cover a surgical procedure until the day before, let alone what the price will be (and said price will vary from insurance company to insurance company, and patient to patient).
The place across town might have shitty radiologists, too. A patient is unlikely to have any access to evaluate that aspect.
The prices for medical procedures in the U.S. are fixed at the well-known, stable amount of whatever the provider thinks it can pry out of you and your insurer.
If you go to a mechanic, and get a quote for your auto repair, in most cases that quote is the maximum amount you can be required to pay. To charge more, or to add on services you did not request, would trigger consumer protection laws against deceptive business practices.
If you go to a physician's practice, and get a quote for your human repair, first off, congratulations are in order for getting any number at all prior to service. But unfortunately, that number that you got is pure coprographitto, and it won't be the upper limit on what you pay.
It's much like those e-commerce deals where you can't see the sale price of an item until you add it to your shopping cart. Except in this case, you don't see the price under after you buy the item. And the sale price has a negative discount, meaning you actually paid more for it. You can't meaningfully comparison shop under those conditions.
This is why those high-deductible plus healthcare savings account plans intended to spur comparison shopping cause people to simply forego treatment altogether instead. The only price people can really be sure of is that not going to the doctor at all costs $0 now out of pocket. Going to any doctor can range from "I can actually afford this," to "healthy and bankrupt beats rich and dead, I guess."
With the individual mandate described by Obamacare, the price of not going to the doctor at all is $695 for each adult, plus $347.50 for each child, plus 2.5% of after-tax income.
First, it's the higher of the per-person fee of $695/adult, $347.50/child, to a maximum of $2,085 or 2.5% of income up to the average annual price of a bronze plan on the exchange ($2,448 in 2014). Not "plus", and there are sensible caps.
Second, that's the price of not having insurance. You can have insurance and not see a doctor (and this is a fairly common choice for folks with a sky-high deductible).
>There is no reason to pay $1,500 for an MRI when there is another place across town willing to do it for $500.
Why should everyone need to individually comparison shop for every medical procedure? Why do two places in the same geographic area have a 3x price discrepancy? Shouldn't I be able to just get an MRI without having to worry that my doctor, or other medical provider, is ripping me off?
Why do two places in the same geographic area have a 3x price discrepancy?
Because determining the cost basis for medical procedures isn't all that easy. It's not hard to figure out what the MRI machine costs, but how about the physician and nurses? How about the building? They do a lot more than just MRIs at these hospitals/clinics. From what I've heard from people working in hospitals, the hospitals themselves have no idea what their procedure costs actually are.
What they do instead is charge as much as they can for each procedure and hope they turn a profit at the end of the year.
-are the enough more people to justify the loss of profit
-that sounds like socialism you filthy altruist and we the board of directors will have none of that.
granted both of those presume that this hypothetical hospital is being governed by a profit motive which isn't always the case but one of the things you see argued fairly commonly on HN is that insurance hiding the cost of medicine has allowed hospitals to jack up rates because the insurance companies can bear higher costs than any individual consumer... which if true and not a correlation/causation error does imply that a profit motive is at play here.
You could only go for the $500 MRI if someone gave you the choice though. If the market will bear a $1500 MRI the two or three hospitals you might have a choice between don't have any real incentive to lower prices. Neither hospital is likely to believe there's a huge untapped market for MRIs that will make up for the loss of profit and an extra $1000 per MRI of profit means they'd have to at least quadruple their volume to make up for the smaller margin.
I think the point is that there are already hospitals that have those kind of price differentials.
Most expensive brain MRI is $5,560. Least expensive $218. Both in NYC.
Most people can access out of network providers. If you're paying 10% in-network, the $5,560 MRI is $556. If you're paying 50% out-of-network, the $218 MRI is $109.
The problem is price transparency and aligned incentives to take advantage of different prices.
In markets where incumbents collude on prices to achieve unreasonably high margins there are usually opportunities for new entrants to enter the market, lower prices, and rapidly capture market share. Government's job is to make sure that there are no artificially high barriers to entry. Sadly, when Government is corrupted it can collude with incumbents and increase barriers to entry to the detriment of consumers.
Yes, the question is absent a government, or at least given some theoretically perfectly business neutral government what are the barriers to entry for (in tfa) an infrastructure company or (in this thread) a modern hospital. I suspect that while compliance with various regulations do add barriers the "natural" barriers are already high enough to keep out sufficient competition to exert real downward pressure.
Competition in the market does precisely nothing when there are few participants, all of them shysters (due to high barriers to entry), and there is no meaningful adult supervision. Note that the libertarian crowd would like to ban the adults from the room because it increases freedom.
When I was in the ER last (knife accident in the kitchen) I asked the front desk lady if they could bill me through an honest coding service. I even offered to pay extra for an error-free bill. Didn't prevent them from tacking on the tetanus shot I never got.
It would probably cost ~750B dollars. It would spook the shit out of investment for a long time. Government would probably be even worse at running it.
And then you'd have to find the public will to spend around 200B to run FTTH everywhere.
Because Verizon's existing management can and would legally allocate billions of dollars to the removal of any elected politician who spearheaded that.
In part, because of the existence proof of doing it that way. No, it's not as simple as saying that AT&T was bad. They established highly reliable landline service. I also hear that Bell Labs did a couple of interesting things in its history. :-) (AT&T wasn't nationalized but it was a regulated monopoly.)
However, you also weren't allowed to so much as provide your own telephone until AT&T was forced to allow it by the government. And phone service, especially outside of a small local area, was shockingly expensive for a very long time. (Yes, some of this is because of technology but AT&T also had little incentive and little interest in cutting rates absent competition.)
For the short video version, cue Lily Tomlin:
We don't care. We don't have to. We're the phone company.
Back in 1984 when the Bell System was under indictment by the DOJ for antitrust violations that was one option that was evaluated. In fact, interesting tid bit, the phone company was briefly nationalized during WWI (https://en.wikipedia.org/wiki/History_of_AT%26T) and was run by the Post Office, similar to how some European countries have done but that arrangement lasted about 1 year. What the DOJ did was to negotiate a settlement which basically divested (broke up) the Bell System into a number of smaller companies. An option that was also floated at the time was to instead require that all communities and states issue at least 2 franchise agreements to two different companies that would be formed from the Bell companies and form a duopoly which in my view would have been a much better approach (it worked fairly well for a time with the mobile phone industry) but the Bell companies lobbied hard against that and instead proposed the settlement of the break up because then they would still hold effectively geographic monopolies. That in my view, was the major error that the DOJ made because it just promulgated the problem on a smaller scale rather than addressing the root cause.
We have the same problem with Verizon in my Pennsylvania town. The copper wire is in such bad shape that it barely works for voice. We tried to use DSL, but our connection dropped whenever it rained. A technician told us it might be months before they could get a truck out. Customer service told us there was nothing wrong with our service. So we swallowed our pride and went back to Comcast, which chortled and said "we knew you'd come crawling back" while twirling its moustache.
Which town are you in? As it happens I own houses in both rural Northeast PA and South Jersey.
My Jersey house must be one of the lucky ones, because I've had FIOS there since about 2009. I can see why the towns are upset, they were promised fiber and now Verizon is bullshitting them with broadband cellular.
As for my PA house. I had asked a tech a few years ago when FIOS would be available here, and his response was "never". I didn't take him at his word, but I'm still getting weekly mailings from Verizon for their 'high speed DSL'.
State College -- we were never promised fiber, but the copper infrastructure is being allowed to rot nonetheless. For another PA data point, my in-laws have a house in Sullivan County where they have passable DSL with Frontier. Verizon is not available there at all.
To overcome the limitations of our domestic ADSL (6 km from exchange over solid aluminium wire voice circuit) I sometimes run queries over an RDP session to my College PC.
Somewhere in the middle, I believe. Penn State is big enough that it's basically its own ISP. They're not buying retail internet service from Comcast, but they do pay for bandwidth. Penn State is also an Internet2 node, but that's not what carries most of their traffic.
I remember going to a few meeting back in 08/09 around Tussey Mountain about a company attempting to bring fiber to State College. I guess that never panned out.
Fun hearsay, it was said that for a period in 98/99, West Halls dorm was one of the largest usage of broadband in the country.
My understanding is that Verizon decided about five years ago not to commit to any new FIOS buildout. All they've been doing since then is finishing what they already committed to. So the tech was probably right.
Ah, but it's not fiber we're talking about, but copper. As far as I can tell, they're years behind on preventative maintenance and unwilling to repair their infrastructure unless there's an outage and they are legally compelled to do so.
Edit: I see you were responding to the immediate parent, not me. Oops.
I have fiber at my NJ House but at my office, which is less than 1.5 miles away, I can't and won't get fiber since Verizon stopped building out the area. And according to the techs it is never going to happen now. Which is disappointing since when I moved in 5 years ago I was told that we were on the map to get fiber at the office (and the house already had it). Fiber is right across the street from the office they just don't want to bring it into the complex (which has about 100 offices).
In Washington State, Verizon sold their land-line business to a company called Frontier. The first thing Frontier did, before the ink even dried on the check, was announce that FIOS roll-outs were cancelled forever.
I also had to swallow my pride and go over to Comcast.
When Frontier asked me why I was cancelling my account, I said: "because you haven't upgraded my DSL speed since 1997, and now you've told me you never will." That operator didn't even bother trying to get me to stay after I gave that reason.
Back in the early 00's AT&T came out 20+ times to fix my DSL issues. At one point, the tech said they wouldn't come out anymore and I had to either live with it or switch to Comcast. I did the latter.
Interestingly, one of the early techs put a TDR on the line and found I needed a new drop cable (the cable from the pole to the house). He put the order in. A few hours later a line guy shows up and says "yeah, we're not going to do that." Basically, he said it would cost them $2,000 to put in a new drop cable and he didn't have the authority for that. The next tech that came out basically told me between a wink and a nod that I should have a "tree trimming accident" where the drop cable was "accidentally" severed. I was too chicken to do it. I switched to Comcast and got 10x the speed, for about 2x the price.
We have a very similar problem with Windstream. Their service sucks and it barely reaches the poor speeds that I'm supposed to get. I'm supposed to get 6mbps down and 768kbps up but I usually get more like 1-3mbps down and 200-400kbps up. I have called to complain more times than I can count and basically get a big old middle finger. Wish a service that didn't suck would come in the area but, aside from satellite or a dedicated line of some sort, windstream is the only one available out here.
Now that people aren't forced to use Verizon's network for telecom service, Verizon shouldn't have to maintain the networks any longer.
Half of people don't have a landline--growing each year. Among those, many get their service via cable companies or VOIP. In 10 years there might not be any need for a functional landline telephone system.
And since the cost of such a system is mostly fixed, not variable, the less people use it, the more it costs per customer. Which only drives the cost up.
Only a fool would spend good money updating this stuff.
Also, in NJ, verizon has an unusual incentive to decrease market share. Whichever company has the majority (more than 50%) market share in a town pays an additional tax to maintain infrastructure. If you drop below 50%, you don't have to pay the tax anymore.
Interesting I wonder who compiles that data exactly? Also what this means is that if you are already clearly over 50% or clearly under 50% your behavior would be predictable and you might consider increasing market share.
That'd be fine if this was just voice. Unfortunately, they're also failing to maintain landline internet, which is a much bigger deal. You can't do your homework on a phone. You can't download updates over a phone's internet connection. You can't run a game console over a phone's internet. You can't get print forms or paperwork with a phone. It's not just internet access that's a requirement - it's usable internet access, and phone internet is not incredibly usable. Tethering is an option, but it often costs something like $30 a month, and even then phone plans, even the $70-a-month 'unlimited' ones, start hitting caps at 5gb or 10gb. What the fuck can you do with 5gb? You can wipe that out with software updates alone.
Offering cellular is unacceptable. If they can't put in fiber, they need to maintain the copper.
(source: comcast took three weeks to fix the internet in our apartment before we just terminated our plan and switched to another provider - lucky use we weren't fucked into only having a single option - spent a week trying to survive on phone internet before putting in the work to do tethering)
It's very possible that it's not possible to deploy fiber profitably.
Remember, Verizon doesn't get exclusive franchise rights to fiber or ISP service. When Verizon rolled out FIOS to areas it thought were going to be most profitable, they ended up not making nearly as much as they thought they would. Turns out people stuck with the cable company. FIOS only get 40% of people in FIOS coverage to actually sign up.
That's why they stopped their FIOS expansion. It was barely profitable in the easy and rich areas. No way is it going to be profitable in poor and rural areas.
In fact, we've always had to subsidize rural and poor areas. The deal was originally that AT&T--which split into the current AT&T and Verizon,etc.--got to have exclusive telephone rights in exchange for making sure everyone got a connection. AT&T was legally entitled to a certain profit margin.
Now governments are expecting the same sorts of benefits without giving Verizon and AT&T the same sort quid pro quo. And they are finding out that nobody is going to build a new fiber network to rural and poor areas.
In fact, Google Fiber is capitalizing on it. The biggest concession Google gets before deploying Fiber, is that they can pick and choose which neighborhoods get Fiber. So they can cherry pick profitable customers.
I think one great compromise is providing LTE coverage without tyrannical data caps. There is no reason to data cap traffic during non-peak periods. And you don't need to tether a phone, there are wifi routers that work on LTE.
If it isn't profitable, maybe they shouldn't have signed contractual agreements and made promises to the govt related to their buildout. They've already gained large benefits from promising to build out their network; it hardly seems unfair to expect them to follow through on their end of the bargain.
> It's very possible that it's not possible to deploy fiber profitably.
So, I have an honest question about this: why is fiber so much more expensive than copper? Is it just that the boxes the ends are bigger and more expensive? I've always heard that digging up land and running wires is nasty, but if that's the case, how were phone lines ever profitable without costing $100 a month?
> I think one great compromise is providing LTE coverage without tyrannical data caps. There is no reason to data cap traffic during non-peak periods. And you don't need to tether a phone, there are wifi routers that work on LTE.
I think that I'd like to make a modification there - I can agree on capping _bandwidth_ during peak periods. _Total transfer quantity_ should never be capped ever. Unless a significant portion of the cost of an internet connection is caused by a difference in expenses running the hardware at 75% utilization instead of 50% utilization, which I kind of doubt is the case. I also don't know if we'd ever get it; the wireless providers love claiming that they're out of capacity and can't even support bigger pictures on imgur, much less people shoving Windows Update through their networks.
That said, yes, an uncapped LTE modem with wifi router and some quality-of-service guarantees would be an excellent compromise.
In principle I agree with your basic point and it applies to wired Internet too. However as a practical matter, you probably either need more capacity in many places--including places that don't want more cell towers. Or you end up either bumping people off at peak times or throttling everyone to unusable levels.
>It's very possible that it's not possible to deploy fiber profitably.
Well, boo hoo for them. If it's not profitable, they shouldn't have signed the contract in the first place. They can't just shirk their contractual obligations because it's financially inconvenient; that's why their called 'obligations', not 'optionals'.
> Now governments are expecting the same sorts of benefits without giving Verizon and AT&T the same sort quid pro quo.
They did give benefits. PA, NJ, and NYC gave Verizon (or predecessors) tax breaks and lighter regulation 20+ years ago in exchange for stringing fiber everywhere. Now the deadlines have passed, and places where you'd reasonably expect residential-grade fiber service to be don't have it.
I think it's less that google can cherry pick profitable customers, and more that google can cherry pick the neighborhoods where their customers will be. E.g., for your neighborhood to get on the build-out list there has to be X demand for it. Keep in mind they have both a free tier (after installation cost, which can be amortized) and a paid tier (with no installation cost).
They're obligated to maintain their networks if only for E911 service. Let's not forget that people still depend on POTS lines for things like calling the police and fire department.
> In 10 years there might not be any need for a functional landline telephone system.
That's fine, but this is today, and we're not there yet.
If the state wants Verizon to provide a public service, the state should pay for it then.
>That's fine, but this is today, and we're not there yet.
But that is the issue. Maintaining a network like that requires longterm capital investment. Verizon can't rent a network for 10 years. If you expect Verizon to operate a service will be gone in ten years, then they have to depreciate the assets over that period. Which increases the price.
Oftentimes, the state has paid for it. In my home state, Verizon-then-GTE was given tax breaks and cash payments to build a rural broadband system. It has not come anywhere close to completing that task, but now it pleads poverty and dumps the crappy copper infrastructure on Frontier.
Those fools were given billions of dollars to upgrade the stuff by state and local governments and never followed through. They either need to write a check on the order of about $50 billion, or they need to follow through on what they promised.
Let's all pretend they didn't just run fiber in the areas they needed it for cell towers and ignored everything else. And as for profitability - it's a long-term investment. If they're laying the right fiber, it will last them a LONG time without needing to be replaced.
One thing that I never see discussed whenever this type of topic comes up is how badly managed the traditional telecoms have been. My first job out of college back in the 80's was with Bell Labs and I worked on a task force to look at how to replace all the old electro-mechanical switching offices. The team I was on came up with the idea to use fiber optics to centralize to one or two main CO's for each state. Traditionally, the way the telecoms set up their networks is they have a CO (Central Office) in each neighborhood, the reason was because of the old analog technology from the early 1900's, the signal simply could not travel very far so there needed to be a station within 5 to 10 miles from the customer. Of course there is no need for that with fiber. Our plan would have saved billions, but they instead decided to just over lash the fiber to existing copper runs and replace the electro-mechanical switch with a digital office. It was a huge blunder in my view. If you look at which companies make money and which loose money in telecom, you can easily see the relationship, cable co's, CLEC's, mobile operators all use the centralized approach, one or two main offices per state and fiber to backhaul to those offices, the losers, the legacy telco's have 100's of CO's for each offices of the profitable companies. It is obvious to see in operational costs but they are completely blind to it. I would put this into the category of "Inventor's dilemma" type of problem.
There was a significant amount of flattening in the initial digital rollout, between SLC-96 and 5ESS remotes (GTD5 and DMS all have similar constructs) they did eliminate some very very small suburban offices. But there was not really another round of office consolidations after the last big round of mergers - with the replacement of the legacy TDM hardware with newer soft switches however this is happening.
This article however touches on an issue unique to Verizon, which is they're letting their copper plant rot in the field, as a way to force customers off of it (the railroads did much the same thing with passenger service in the early 50's) when Frontier has bought a former GTE/Verizon area, they usually have to hire a bunch more in the way of field techs, and spend millions on OSP upgrades and repairs - to the point that additional FiOS expansion in the immediate future is unfeasible due to cost.
The future is going to have a mix of wireline and wireless - and some of it will still be copper, I still believe the best architecture for the future is FTTN (fiber to the node) with a node every block (or 3-400 yards) allowing for sub 1000 ft loops. I still think this offers the best price/performance ratio.
Agreed, at this point the wired services are not profitable and they want to let the plant rot as you said. I agree, there needs to be a mix of fiber and wireless. The emphasis on wireless is because it is seen as being more profitable, however that is eroding quickly. Perhaps Google fiber and similar initiatives will spark some more activity around FTTH, FTTN.
I actually disagree that wireline services are not profitable, they are profitable, generate a very stable rate of return - but they are not generating the rate of return, and more importantly growth rates the market expects. Because of this, Verizon is trying to starve them to make its balance sheet look better - which in the short term works, but it will also hasten the demise of what is a somewhat lucrative revenue stream.
FTTN Makes the most sense in dense and semi dense urban and suburban areas - FTTH/P makes more sense in very rural places, I'm seeing movement on FTTP by CenturyLink, Frontier seems very interested in expanding its existing FTTH footprint, but is not doing so yet.
because its so capital intensive, I don't think there is anything you can do to make the rate of return better either. That's the trouble, its a good stable business, but no longer in vogue.
I am not trying to defend Verizon, but the goal of the FCC is to move off of copper lines. However the rules state that phone companies cannot do that if any service is interrupted which also apparently means if a customer doesn't want to move off of copper they don't have too. So which is it? Do we move people to fiber? There are many who hold on to copper lines because they have a central power source whereas fiber does not.
My other concern is, why should they pick up the tab for maintaining connections on an obsolete system if the new one will serve the area?
The problem is that they refuse to build out fiber in areas where they are unlikely to sell a lot of high-dollar, high-margin TV packages.
In rural and low-income areas, Verizon wants to let the old copper infrastructure rot, but they are uninterested in building out a real replacement. Instead, they push low-margin customers to grossly inferior wireless services.
4G LTE that works without a single wire in your home, with no truck rolls, and throughout the USA is hardly "grossly inferior". Not preferred by some, definitely...but not grossly inferior.
4G LTE isn't a valid choice for anyone who wants low-latency (online gamers, and it doesn't even have to be a "twitch" game), or anyone who balks at $205/month for 30gb (AT&T price)
Yes! Datacapped services are not a viable option. It'd be great to move to cell service as my phone gets faster download speeds than the fastest broadband available locally but I'd be capped at 10gb of data or be paying some outrageous amount for more and that's like 3-4 movies worth of space... ridiculous.
Not from Verizon's perspective, sure. But there are a lot of consumer shortcomings to LTE vs a wired connection: slower data rates, more latency, data caps, no net neutrality protection, blocked by trees and terrain, slowed by certain kinds of home construction, slowed by weather, and greater sensitivity to power outages.
LTE is great for when folks are out and about, but at home or work, even a halfway decent DSL line beats it. Fiber kills it across the board.
Just remember that if you're ever in the position of having to press Verizon up against the wall, they're legally obligated to fix the outside plant, whether copper or fiber.
They're also obligated to provide you with non-VoIP (marketed under things like the Verizon Freedom package) phone service over fiber. The service is implemented much better, and since it's legally phone service, is obligated to meet a certain quality standard and be fixed in a certain length of time if it breaks.
In any case, it really does piss me off to see how far the telecom market has sunk. A lot of these companies have never gotten over the monopoly mindset, and really do nothing other than hold themselves back in every way possible.
It's times like these, I kinda want to go buy one of these markets Verizon has effectively abandoned, and put the whole industry to shame.
> I kinda want to go buy one of these markets Verizon has effectively abandoned, and put the whole industry to shame.
The Google Fiber experiment has proven that if you put the whole (US) industry to shame in an incredibly public way that gets covered multiple times by just about every news outlet in the country... that it will have no effect at all on the entrenched players (except perhaps causing them to lower their prices in the areas you serve in order, I suppose, to harm your income).
Please do! I'm on FiOS right now, and apparently Verizon doesn't want to have to maintain it, so they've sold it to Frontier who I've read are terrible and also won't do anything new with it. I would love to have a non-TimeWarner/AT&T option that's as fast as FiOS.
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[ 3.3 ms ] story [ 134 ms ] threadWhat causes this obligation?
Verizon predecessor New Jersey Bell agreed to the statewide broadband buildout in a 1993 agreement with the state. In exchange for a different form of price regulation that would allow the company to make more money, "Verizon agreed to upgrade its network to provide broadband to every Verizon New Jersey business and residential customer, school, and library for 100 percent of its service territory," according to the state's Division of Rate Counsel.
http://arstechnica.com/tech-policy/2014/04/verizon-led-massi...
I assume part of the takeover/merger that happened also merged the previous responsibilities.
It's probably a requirement for building fiber to commercial or government locations if a customer is willing to pay. Stuff that Telecom's do, it's just very expensive.
They also counter advertised against MCI, founded as Microwave Communications, Inc., on the basis of their using fiber and MCI still using a lot of microwave. From http://www.fundinguniverse.com/company-histories/sprint-corp... E.g.:
"In a spirited demonstration of the obsolescence of the microwave networks operated by AT&T and MCI, US Sprint blew up one of the last of its own microwave towers in February 1988."
I remember seeing a print add at the time with a picture of the controlled demolition in progress.
I'm willing to bet 50 bucks, the so called expert is misinterpreting the contract or statements by Verizon.
This is supposed to provide a higher level of service to the consumer/citizen of the area that makes the agreement, while also meaning telecoms don't waste their massive upfront costs by having no customers. It's supposed to provide the same impetus to improve service as competition. In practice, you get this kind of nonsense.
I assumed we were talking about ^^^.
I'm not being pedantic about the distinction. If you're of a libertarian bent, there is a big difference between legal and de-facto monopolists.
Telecom providers work with government bodies to place and access poles via eminent domain. Even with cellphones similar considerations exist for the placement of towers. Providers can work directly with private landowners but performing all such negotiations individually is not feasible.
Thus in exchange for the State of New Jersey supporting Verizon there are complimentary obligations for Verizon in return.
On Verizon failing to meet its obligations to a city:
http://arstechnica.com/business/2015/06/verizon-ordered-to-f...
http://arstechnica.com/business/2015/06/22-years-after-veriz...
On Verizon letting their copper landline decay:
http://arstechnica.com/information-technology/2014/08/why-ve...
http://arstechnica.com/business/2015/07/verizon-let-us-insta...
http://arstechnica.com/tech-policy/2015/09/verizon-union-see...
I really hate that they're the best service in my area, because I think they're scum. But then, I think all the major telcos are scum.
The solution is decentralization through mesh networks.
REAL competition.
That said, although obviously the government can show up with guns wherever they want and tap whatever they want, I suspect the legal situation would be much different if we're looking at government-owned infrastructure vs. privately owned infrastructure.
If we can provide a mesh network that is as effective as older topologies but cheaper, the problem is solved, period.
If we break up ISPs into smaller ISPs, then we have to maintain that solution, as giant companies are constantly lobbying government to allow them to re-establish monopolistic practices. History tells us anti-monopolistic policies don't last. The split and re-merging of phone companies happened in under a decade. Glass-Steagall worked for a long time, but finally died.
I have no argument that there are major technical hurdles to clear before we can have mesh networks, but once those hurdles are cleared, the power is decentralized into the hands of individuals. Individuals can join together to force through legislation, but the power remains centralized in government, and maintaining that is extremely difficult.
To be clear, I give money to the EFF and I've called my congressmen on issues like net neutrality: I don't mean to downplay the importance of these efforts. But these are temporary solutions, workarounds to the problem, rather than solutions.
Personally, I would love to see some sort of decentralization.
I think the downvotes are because the poster basically handwaved a complex problem by saying that THE solution is mesh networks.
I play video games, and I can't imagine what the latency would be like over a mesh network. So many hops, so many pieces of questionable cheap home hardware handling my data...
You will end up with a random geographic distribution of radios with different capabilities. The number of network hops will be reduced because, as with skip lists, you find a path to high capacity station, then skip longs distances, then find the final recipient.
In practice this would be difficult to deploy (Can you legally give high power stations? What about RF safety of higher power stations?), but I think the idea is neat.
1. Neither can anyone, because we don't have examples of large-scale usage of mesh networks, and the amount of research that has gone into mesh networks is nowhere near as extensive as exists with ISPs. There's no reason to assume that mesh networks will always have higher latency, especially in places where i.e. Comcast is choking connections.
2. The small-scale mesh networks which already exist are demonstrably adequate for many, many use-cases. Mesh networks which handle text and image web browsing, email, instant messaging, are still extremely useful even if they have trouble handling streaming video and video games.
My wife had elective surgery- I had a high deductible plan at the time with an HSA account. When we asked what the total cost would be, the quote was ~$1100. The total bills that came to us were well over three times that. There is no real recourse for this, we wrote letters, called governing agencies in our area and were nearly sent to collections before I just paid for it.
Free market capitalism is far from what we have in almost every service-based industry in my experience, and companies fight tooth and nail to ensure it stays that way.
That sounds like an opportunity, no? If I were a hospital, I'd start providing cost guarantees to my patients and their insurers.
In fact, some of that is already starting to happen with capitated payment systems. Instead of paying for each procedure, a hospitals get a fixed amount per patient per year. If they can keep costs low, they keep the difference. If they can't, they take a loss.
It's important to remember a lot of healthcare providers are hamstrung by current regulations as well. Even just to start a new hospital, you need to get a "certificate of need" from your state.
Healthcare is far from a free market in the US.
Why? Healthcare consumers are largely price insensitive. They currently have no incentive to 'shop around' and reward lower priced providers.
We are only starting to see innovative service providers that are trying to change this.[0]
[0]http://www.npr.org/2015/10/09/447098694/why-most-people-don-...
Same for free-market solutions, especially in an industry with enormous barriers to entry like the telecom world.
> There is no reason to pay $1,500 for an MRI when there is another place across town willing to do it for $500.
Good luck getting a quote for a medical procedure in the US. Hospitals frequently can't tell if you if insurance will even cover a surgical procedure until the day before, let alone what the price will be (and said price will vary from insurance company to insurance company, and patient to patient).
The place across town might have shitty radiologists, too. A patient is unlikely to have any access to evaluate that aspect.
If you go to a mechanic, and get a quote for your auto repair, in most cases that quote is the maximum amount you can be required to pay. To charge more, or to add on services you did not request, would trigger consumer protection laws against deceptive business practices.
If you go to a physician's practice, and get a quote for your human repair, first off, congratulations are in order for getting any number at all prior to service. But unfortunately, that number that you got is pure coprographitto, and it won't be the upper limit on what you pay.
It's much like those e-commerce deals where you can't see the sale price of an item until you add it to your shopping cart. Except in this case, you don't see the price under after you buy the item. And the sale price has a negative discount, meaning you actually paid more for it. You can't meaningfully comparison shop under those conditions.
This is why those high-deductible plus healthcare savings account plans intended to spur comparison shopping cause people to simply forego treatment altogether instead. The only price people can really be sure of is that not going to the doctor at all costs $0 now out of pocket. Going to any doctor can range from "I can actually afford this," to "healthy and bankrupt beats rich and dead, I guess."
First, it's the higher of the per-person fee of $695/adult, $347.50/child, to a maximum of $2,085 or 2.5% of income up to the average annual price of a bronze plan on the exchange ($2,448 in 2014). Not "plus", and there are sensible caps.
https://www.healthcare.gov/fees/fee-for-not-being-covered/
Second, that's the price of not having insurance. You can have insurance and not see a doctor (and this is a fairly common choice for folks with a sky-high deductible).
Why should everyone need to individually comparison shop for every medical procedure? Why do two places in the same geographic area have a 3x price discrepancy? Shouldn't I be able to just get an MRI without having to worry that my doctor, or other medical provider, is ripping me off?
Because determining the cost basis for medical procedures isn't all that easy. It's not hard to figure out what the MRI machine costs, but how about the physician and nurses? How about the building? They do a lot more than just MRIs at these hospitals/clinics. From what I've heard from people working in hospitals, the hospitals themselves have no idea what their procedure costs actually are.
What they do instead is charge as much as they can for each procedure and hope they turn a profit at the end of the year.
-are the enough more people to justify the loss of profit
-that sounds like socialism you filthy altruist and we the board of directors will have none of that.
granted both of those presume that this hypothetical hospital is being governed by a profit motive which isn't always the case but one of the things you see argued fairly commonly on HN is that insurance hiding the cost of medicine has allowed hospitals to jack up rates because the insurance companies can bear higher costs than any individual consumer... which if true and not a correlation/causation error does imply that a profit motive is at play here.
If I were a patient, I'd go for the $500 MRI and pay $100 out of pocket instead of $300.
Most expensive brain MRI is $5,560. Least expensive $218. Both in NYC.
Most people can access out of network providers. If you're paying 10% in-network, the $5,560 MRI is $556. If you're paying 50% out-of-network, the $218 MRI is $109.
The problem is price transparency and aligned incentives to take advantage of different prices.
When I was in the ER last (knife accident in the kitchen) I asked the front desk lady if they could bill me through an honest coding service. I even offered to pay extra for an error-free bill. Didn't prevent them from tacking on the tetanus shot I never got.
And then you'd have to find the public will to spend around 200B to run FTTH everywhere.
At this point, I'm not sure that's possible...
However, you also weren't allowed to so much as provide your own telephone until AT&T was forced to allow it by the government. And phone service, especially outside of a small local area, was shockingly expensive for a very long time. (Yes, some of this is because of technology but AT&T also had little incentive and little interest in cutting rates absent competition.)
For the short video version, cue Lily Tomlin:
We don't care. We don't have to. We're the phone company.
https://www.youtube.com/watch?v=CHgUN_95UAw
My Jersey house must be one of the lucky ones, because I've had FIOS there since about 2009. I can see why the towns are upset, they were promised fiber and now Verizon is bullshitting them with broadband cellular.
As for my PA house. I had asked a tech a few years ago when FIOS would be available here, and his response was "never". I didn't take him at his word, but I'm still getting weekly mailings from Verizon for their 'high speed DSL'.
Does the College itself get a government/academic feed or do academic institutions have to rely on local commercial providers?
UK has janet and UKERNA.
https://www.jisc.ac.uk/network
http://icannwiki.com/UKERNA
To overcome the limitations of our domestic ADSL (6 km from exchange over solid aluminium wire voice circuit) I sometimes run queries over an RDP session to my College PC.
Fun hearsay, it was said that for a period in 98/99, West Halls dorm was one of the largest usage of broadband in the country.
Edit: I see you were responding to the immediate parent, not me. Oops.
I also had to swallow my pride and go over to Comcast.
When Frontier asked me why I was cancelling my account, I said: "because you haven't upgraded my DSL speed since 1997, and now you've told me you never will." That operator didn't even bother trying to get me to stay after I gave that reason.
The internet providers are just as bad as the railroads. The have too much power to control which towns and cities thrive in the modern world.
In a way you've got to hand it to them. Everyone hates them, and yet they remain one of the most viable players, nationwide.
Interestingly, one of the early techs put a TDR on the line and found I needed a new drop cable (the cable from the pole to the house). He put the order in. A few hours later a line guy shows up and says "yeah, we're not going to do that." Basically, he said it would cost them $2,000 to put in a new drop cable and he didn't have the authority for that. The next tech that came out basically told me between a wink and a nod that I should have a "tree trimming accident" where the drop cable was "accidentally" severed. I was too chicken to do it. I switched to Comcast and got 10x the speed, for about 2x the price.
Half of people don't have a landline--growing each year. Among those, many get their service via cable companies or VOIP. In 10 years there might not be any need for a functional landline telephone system.
And since the cost of such a system is mostly fixed, not variable, the less people use it, the more it costs per customer. Which only drives the cost up.
Only a fool would spend good money updating this stuff.
Offering cellular is unacceptable. If they can't put in fiber, they need to maintain the copper.
(source: comcast took three weeks to fix the internet in our apartment before we just terminated our plan and switched to another provider - lucky use we weren't fucked into only having a single option - spent a week trying to survive on phone internet before putting in the work to do tethering)
Remember, Verizon doesn't get exclusive franchise rights to fiber or ISP service. When Verizon rolled out FIOS to areas it thought were going to be most profitable, they ended up not making nearly as much as they thought they would. Turns out people stuck with the cable company. FIOS only get 40% of people in FIOS coverage to actually sign up.
That's why they stopped their FIOS expansion. It was barely profitable in the easy and rich areas. No way is it going to be profitable in poor and rural areas.
In fact, we've always had to subsidize rural and poor areas. The deal was originally that AT&T--which split into the current AT&T and Verizon,etc.--got to have exclusive telephone rights in exchange for making sure everyone got a connection. AT&T was legally entitled to a certain profit margin.
Now governments are expecting the same sorts of benefits without giving Verizon and AT&T the same sort quid pro quo. And they are finding out that nobody is going to build a new fiber network to rural and poor areas.
In fact, Google Fiber is capitalizing on it. The biggest concession Google gets before deploying Fiber, is that they can pick and choose which neighborhoods get Fiber. So they can cherry pick profitable customers.
I think one great compromise is providing LTE coverage without tyrannical data caps. There is no reason to data cap traffic during non-peak periods. And you don't need to tether a phone, there are wifi routers that work on LTE.
So, I have an honest question about this: why is fiber so much more expensive than copper? Is it just that the boxes the ends are bigger and more expensive? I've always heard that digging up land and running wires is nasty, but if that's the case, how were phone lines ever profitable without costing $100 a month?
> I think one great compromise is providing LTE coverage without tyrannical data caps. There is no reason to data cap traffic during non-peak periods. And you don't need to tether a phone, there are wifi routers that work on LTE.
I think that I'd like to make a modification there - I can agree on capping _bandwidth_ during peak periods. _Total transfer quantity_ should never be capped ever. Unless a significant portion of the cost of an internet connection is caused by a difference in expenses running the hardware at 75% utilization instead of 50% utilization, which I kind of doubt is the case. I also don't know if we'd ever get it; the wireless providers love claiming that they're out of capacity and can't even support bigger pictures on imgur, much less people shoving Windows Update through their networks.
That said, yes, an uncapped LTE modem with wifi router and some quality-of-service guarantees would be an excellent compromise.
http://www.elvispresleymusic.com.au/pictures/1973-april-2-ph...
Well, boo hoo for them. If it's not profitable, they shouldn't have signed the contract in the first place. They can't just shirk their contractual obligations because it's financially inconvenient; that's why their called 'obligations', not 'optionals'.
They did give benefits. PA, NJ, and NYC gave Verizon (or predecessors) tax breaks and lighter regulation 20+ years ago in exchange for stringing fiber everywhere. Now the deadlines have passed, and places where you'd reasonably expect residential-grade fiber service to be don't have it.
http://www.huffingtonpost.com/bruce-kushnick/verizon-pennsyl...
https://www.techdirt.com/articles/20131012/02124724852/decad...
> In 10 years there might not be any need for a functional landline telephone system.
That's fine, but this is today, and we're not there yet.
>That's fine, but this is today, and we're not there yet.
But that is the issue. Maintaining a network like that requires longterm capital investment. Verizon can't rent a network for 10 years. If you expect Verizon to operate a service will be gone in ten years, then they have to depreciate the assets over that period. Which increases the price.
Oftentimes, the state has paid for it. In my home state, Verizon-then-GTE was given tax breaks and cash payments to build a rural broadband system. It has not come anywhere close to completing that task, but now it pleads poverty and dumps the crappy copper infrastructure on Frontier.
Let's all pretend they didn't just run fiber in the areas they needed it for cell towers and ignored everything else. And as for profitability - it's a long-term investment. If they're laying the right fiber, it will last them a LONG time without needing to be replaced.
This article however touches on an issue unique to Verizon, which is they're letting their copper plant rot in the field, as a way to force customers off of it (the railroads did much the same thing with passenger service in the early 50's) when Frontier has bought a former GTE/Verizon area, they usually have to hire a bunch more in the way of field techs, and spend millions on OSP upgrades and repairs - to the point that additional FiOS expansion in the immediate future is unfeasible due to cost.
The future is going to have a mix of wireline and wireless - and some of it will still be copper, I still believe the best architecture for the future is FTTN (fiber to the node) with a node every block (or 3-400 yards) allowing for sub 1000 ft loops. I still think this offers the best price/performance ratio.
FTTN Makes the most sense in dense and semi dense urban and suburban areas - FTTH/P makes more sense in very rural places, I'm seeing movement on FTTP by CenturyLink, Frontier seems very interested in expanding its existing FTTH footprint, but is not doing so yet.
My other concern is, why should they pick up the tab for maintaining connections on an obsolete system if the new one will serve the area?
In rural and low-income areas, Verizon wants to let the old copper infrastructure rot, but they are uninterested in building out a real replacement. Instead, they push low-margin customers to grossly inferior wireless services.
LTE is great for when folks are out and about, but at home or work, even a halfway decent DSL line beats it. Fiber kills it across the board.
They're also obligated to provide you with non-VoIP (marketed under things like the Verizon Freedom package) phone service over fiber. The service is implemented much better, and since it's legally phone service, is obligated to meet a certain quality standard and be fixed in a certain length of time if it breaks.
In any case, it really does piss me off to see how far the telecom market has sunk. A lot of these companies have never gotten over the monopoly mindset, and really do nothing other than hold themselves back in every way possible. It's times like these, I kinda want to go buy one of these markets Verizon has effectively abandoned, and put the whole industry to shame.
The Google Fiber experiment has proven that if you put the whole (US) industry to shame in an incredibly public way that gets covered multiple times by just about every news outlet in the country... that it will have no effect at all on the entrenched players (except perhaps causing them to lower their prices in the areas you serve in order, I suppose, to harm your income).