News from the Vibrant Free Market

The cheeseburger in paradise that is our wired and wireless broadband market consistently rewards our faith in the unfettered, unregulated free market. First, wireless: we pay more for less speed:

[…] In fact, out of the 40 countries with the most LTE tests in 2013, the US offered slower speeds than all of them, with the exception of the Puerto Rico, the Philippines, and India. Japan didn’t fare much better, just one slot faster than the US.

But it’s the cost that makes these speeds particularly painful to swallow. On average, Verizon charged roughly $4.05 per Mbps of LTE download speed in 2013, compared to just $2.25 for UK carrier EE. In fact, out of the major international carriers we compared, all of them except Japan’s NTT Docomo were about half as expensive as Verizon. […]

Similarly, the wired Internet is not faring any better, where Cogent, Netflix’ Internet provider, and Verizon are battling:

There are about 11 Cogent/Verizon peering connections in major cities around the country. When peering partners aren’t fighting, they typically upgrade the connections (or “ports”) when they’re about 50 percent full, Cogent says. They can do this by adding ports, adding capacity to ports, or peering in new locations.
[…]
“Once a port hits about 85 percent throughput, you’re going to begin to start to drop packets,” he said. “Clearly when a port is at 120 or 130 percent [as the Cogent/Verizon ones are] the packet loss is material.”

The congestion isn’t only happening at peak times, he said. “These ports are so over-congested that they’re running in this packet dropping state 22, 24 hours a day. Maybe at four in the morning on Tuesday or something there might be a little bit of headroom,” he said.
[…]
In some cases, Verizon has actually purchased and installed the necessary equipment to upgrade ports, but not turned it on, according to Schaeffer. “They actually put it in, so they spent the money, but they just politically have not been willing to turn it on in order to ensure that Netflix will not work as well as Redbox,” he said.

Redbox is Verizon’s video service, which I’m sure runs great on Verizon’s network, unlike Netflix. But that’s the price of competition: Verizon is competing with Netflix on a level playing field, and if your Verizon service slows to a crawl (because it’s not only Netflix that runs on Cogent’s network), that’s just the price you pay for freedom.






37 replies
  1. 1
    Baud says:

    I blame unions.

  2. 2
    Baud says:

    I also blame tech libertarians who buy into the “government is regulating the internet” meme whenever liberals suggest that government should do something about this.

  3. 3
    Baud says:

    And to spice things up a bit, I also blame Greenwald.

  4. 4
    Poopyman says:

    @Baud: I blame porn.

  5. 5
    Tommy says:

    What I find funny is Verizon et al advertise a G4 network. Not so much. Travel out of the the US and our wireless network is like 1.5 Generations (that G) behind. Heck Sweden a few years ago did something amazing. The local phone company was thinking of wiring fiber directly into homes. The government told them if they did, and they opened up the fiber to competition, they’d give them huge tax credits. To where it was almost free for them to do it. They were all in for this.

  6. 6
    gelfling545 says:

    I’ve been surprised to read about Netflix problems on Verizon. I had Verizon “high speed” internet until Jan. & never had a problem with Netflix. I moved over to FIOS due to problems with some other content providers (& the fact that on Sundays & holidays there can be about 11 iPhones in the house not to mention 2 computers & a Roku box & the wireless service was freaking out) but Netflix was always fine.

  7. 7
    Baud says:

    This surprised me.

    Americans typically use far more data than their peers abroad. According to one report, US subscribers used an average of 1.2GB per month in 2013, compared to 240MB per month globally.

  8. 8
    Wag says:

    @Baud:

    I blame onions.

  9. 9
    WereBear says:

    How can there be competition when nobody is offering a better service? Tell me that, galtian fanbois.

  10. 10
    PsiFighter37 says:

    @Baud: I blame net neutrality. If you just unleashed the pure forces of free-market capitalism, you’d get the bestest, most coolest Internets EVAR!!11!1!

  11. 11
    NotMax says:

    If you build it, they will come.

    And then you have to build more.

  12. 12
    Tommy says:

    Let me tell you a story. My little rural town figured out how to complete some paperwork and we got a $750,000 grant from the Feds. Under the Recovery Act. We used it to create a fiber backbone. We wired every school, Post Office, well all government buildings with fiber. We are now thinking of doing fiber into businesses and homes. But we are fearful of lawsuits. That Charter or Verzion will sue. They have done it before.

    I get my power, water, sewage, and trash pick-up through my city. Through co-ops. One bill. I pay $79 for Internet access and we feel we can offer a better service for less. But again fearful of legal issues.

  13. 13
    AnonPhenom says:

    Save your old routers. Download the app to your mobile devices. Talk to your neighbors about doing the same.

    http://m.youtube.com/watch?v=hMoZNaftS9E

    The only thing that will move the ISPs is the threat of the loss of market share.

  14. 14
    Baud says:

    I was trying to post a quote from the article and was marked as spam. It said that Americans used more wireless data than the average in other countries. That surprised me.

  15. 15
    Baud says:

    I recently read that Google fiber is building out in new markets. So some good news there.

  16. 16
  17. 17
    OzarkHillbilly says:

    @Baud: I blame you.

  18. 18
  19. 19
    Baud says:

    @OzarkHillbilly:

    Twenty-four hours of 4K porn does tend to clog up the tubes. Sorry.

  20. 20
    Botsplainer says:

    Mix, to hate rentiers is to hate America, sweet white grannies in white picket fence enclosed cottages, apple pie, the sainted Troops and sweet baby Jesus.

    Somewhere, a solitary bald eagle is shedding a single mournful tear over your perfidy.

  21. 21
    Poopyman says:

    @Baud: I would be willing to bet that Americans are the biggest consumers of porn, too.

  22. 22
    gene108 says:

    Ha! Ha! Ha! Ha!

    SUCK IT JAPANESE-EURO-WEENIE-SOCIALIST-SCUM!!!!!!!!

    Our monopolistic telecom monopolies work like proper monopolies: Make more profits and provide less service!!!!

    USA! USA! USA! USA! USA!

  23. 23
    gene108 says:

    @Poopyman:

    I would be willing to bet that Americans are the biggest consumers of porn, too.

    I think per capita, the Japanese* maybe up there, though in sheer volume we’d be higher because of a larger population.

    * They did not invent tentacle porn just for Americans.

  24. 24
    WereBear says:

    @Poopyman: Are you familiar with Japan?

    And I understand Utah alone outdistances everyone.

  25. 25

    @gene108:
    Tentacle porn is a classic Japanese art style, going back to old folk songs and legends about a woman mating with an octopus and his son simultaneously. There are many nineteenth century paintings on the subject.

    @WereBear:
    Unfortunately, Utah is part of the United States.

  26. 26
    WereBear says:

    Okay, for everyone at Balloon Juice, I risked the Google ads to come and searched for porn use nationwide:

    Around the globe, the top three consumers of pornography are China (28 percent of the market), South Korea (27 percent) and Japan (21 percent). The US comes in fourth with a measly 14 percent of porn purchases. Porn use around the world

  27. 27
    Howard Beale IV says:

    @Baud: Whoa.

  28. 28
    Jay C says:

    Verizon has done a lot in the past couple of days to repeatedly push my “hate” button: one of our 2 phone lines went dead the other day, and their “repair” solution was to send two guys out to install a FIOS system in our (Manhattan) apartment. Which, I found out would entail a LOT of drywall remodeling and rewiring in our front hall and closet, due to the extraordinarily half-assed job they did in putting in the fiber conduits, I sent them away, not wanting to deal yesterday, but was told (after about 55 mins total of wait time on the phone), that eventually, they would have to do the fiber installation anyway, as they are committed to “converting” their whole network from “copper” (their new buzzword, rather like “steam” in transportation) to fiber-optic.

  29. 29

    “we pay more for less speed”

    Remarkably like health care, isn’t it?

    Is there anything that can’t be mucked up by privatization?

  30. 30
    John D. says:

    @Jay C: Uh, what do you think the signals travel over once they reach your router? Your choices are “copper” or “glass”, BTW.

  31. 31
    p.a. says:

    How are these super speed foreign services structured? Is there really competition, or are local monopolies tightly regulated to ensure profits get rolled back into service improvements? Because if there is true competition, in theory aren’t the profits supposed to >0? And if so, where does the $ come from for continuous upgrades? Here in the US, we have deregulated ‘competition’; there is nothing but the invisible hand available to improve service, and we can see the results. I’m talking wired broadband; cellular has other issues that I’m not as familiar with. As a Vz employee, I know we generally won’t push FiOS into areas that already have at least 2 broadband vendors; the cost is greater than the potential market capture share provides where there is already competition. And before anyone comments that the issue is therefore our prices, let’s remember that this website is a fine home for progressives, and Vz, ATT and ATT Cellular are about the only unionized workforces left in the industry. My corporate masters earn ridiculous profits, but my union brothers and I negotiate for a better share of them than almost any other workers in the industry.
    Should that be a problem for progressives?

  32. 32
    Howard Beale IV says:

    @John D.: Or OTA.

  33. 33
    trollhattan says:

    @WereBear:

    Wow, we suck at everyth…we don’t suck at anyth…we can’t lose for wi….

    USA, USA, USA!

  34. 34
    DFH says:

    @p.a.:

    The constant CREDO emails I receive never mention unions, p.a. It’s always about Vz’s and ATT’s investments and NSA cooperation, etc.

    It’s interesting to read the perspectives in this thread and all over B-J, I learn and laugh a lot.

  35. 35
    John D. says:

    @Howard Beale IV: He said “rewiring”, which I took to mean physical transmission instead of OTA.

  36. 36
    Glocksman says:

    As far as cellular goes, you can go cheaper than the ‘Big 4’ postpaid plans by using a prepaid plan if you’re buying a single line and service.
    The main drawback is that you’re either on a shitty national network (Sprint, T-Mobile), getting slower performance (slower pings and network prioritzation) if the MVNO uses Verizon or ATT, or both.

    Then there’s the cost of paying upfront for the entire cost of the phone.

    My first cellphone was a contract Samsung flip phone.
    Cost was $45/month for 450 minutes with rollover.
    When it broke, I bought a $20 Nokia barphone that I used for years until I switched carriers and bought a Virgin Mobile* ‘semismart’ (Samsung Intercept) android phone.

    I then paid $25/month for 300 minutes and 2GB data, though the Intercept turned out to be so painful to use as a smartphone I hardly used any data at all.

    I replaced it with a HTC Wildfire S that performed better and started to show just how shitty Sprint’s local data coverage was.
    The point was driven home when I replaced the HTC with a Galaxy S2 and paid $45/month for 500 minutes/2.5GB data that I couldn’t use half of the time.

    Wonderful phone crippled by Sprint’s lousy network buildout.

    I finally bit the bullet and bought a unlocked Nexus 5 from Google and tried both T-Mobile ($30/month 5GB plan) and ATT.
    When I could get a signal, T-Mobile was fast.
    45 Mbps fast according to Speedtest.
    The problem was that T-Mobile’s local coverage is even worse than Sprint’s and there were a lot of areas in town where I either had 2G speeds or no connection at all.

    ATT is much more expensive ($60/month unlimited voice/2GB data), but the local coverage is excellent.
    It’s also fast, and GoPhone has the same priority on ATT towers as the postpaid customers.

    I thought about switching to Straight Talk’s $45/month ‘unlimited’ plan, but the horror stories of their throttling, extremely slow ping times, low priority on ATT’s towers, lousy customer service, Indian tech support that can’t speak clear English, and all around assholishness disabused me of that notion.

    Though I could save $10/month by switching to Consumer Cellular’s 500 minute voice/2 GB data plan and save even more when I become eligible for AARP membership in 3 years. :)

    *Sprint wholly owned Mobile Virtual Network Operator

  37. 37
    oldswede says:

    “. . . out of the 40 countries with the most LTE tests in 2013, the US offered slower speeds than all of them, with the exception of the Puerto Rico, the Philippines, and India . . .”

    Puerto Rico is not a country. It is a territory of the U.S.

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