Re:Netflix and Alphabet will need to become ISPs, fast
by isostatic on Wednesday June 13, 2018 @06:56PM
(#17307720)
Your pipe examples are a failure of the market to correctly capture externalities.
I'm not sure how not having cheap fibre to ge doorstep is an externality.
Re:Netflix and Alphabet will need to become ISPs, fast
by rayiner on Wednesday June 13, 2018 @08:02PM
(#17308128)
There is no market for sewer service—most everywhere, the government runs the service and sets rates in response to voter pressure. My point is that the same voters who vote to keep lead water pipes and overflowing sewers, because they want to minimize their water and sewer bills, will not vote to deploy cheap fiber everywhere (or not set rates high enough to continue to maintain and upgrade it). For most people, especially the older people who disproportionately vote, a 25 mbps connection is fast enough, and they’d rather have cheaper service than better service.
Your post actually highlights the problem. What makes 10% the proper profit margin? BT OpenReach, the U.K.'s regulated infrastructure monopoly, has a profit margin of double that. That number becomes a political football, and the political result probably isn't what most people on HN would want. People are happy with 25 mbps DSL; they're not going to vote to raise Internet rates to drive returns high enough to incentivize investment in replacing everything with fiber. That's exactly what you see in other rate-regulated utilities. People don't vote to replace lead pipes that poison kids, because they would rather have cheaper water rates; they don't vote to replace sewers that leak raw sewage into rivers when it rains, because they'd rather have cheaper sewage fees.