Why your internet isn’t as good as it should be.

By on February 22, 2013 7:49:06 AM from JoeUser Forums JoeUser Forums

DrJBHL

Join Date 04/2002
+2159

 

Not discussing the content.

I’m discussing how the basic principal of Capitalism has failed us: Competition in a free market.

We all agree that when power is concentrated in the hands of a few, our freedoms are inevitably curtailed.

This is true, as it turns out, regarding the internet as well.

“At the heart of the problem lie a few powerful companies with enormous influence over policy making. Both the wireless and wired markets for high-speed Internet access have become heavily concentrated, and neither is subject to substantial competition nor oversight. … As a result, prices are too high and speeds too slow.” – Susan Crawford

Susan Crawford is the Benjamin N. Cardozo Law School Professor, and a former special assistant to President Obama for science, technology and innovation. Her central thesis is that if you live in the U.S.A., you’re probably paying a lot more to your ISP for inferior service when compared to other countries.

At the heart of the problem, she maintains, is the above quote. Huge cable companies like Time Warner and Comcast have no reason to to expand the infrastructure to lay down fiber. Also, Verizon and AT&T have abandoned fiber in favor of LTE. This will limit us to average speeds.

Further: The government has policies to protect and give them resources to propagate their grip on the internet service market. I wonder how those laws got written, and by whom.

“The resounding success of Google Fiber in Kansas City has already started to help this shift in expectations. People around the country are already jealous that some people have access to 1 Gbps Internet for just $70 a month, but most of us don’t.” – Andrew Couts

We need more companies and people pressuring local government to lay down fiber optic cable to provide better and faster service. The key to this is providing low interest, long term loans to allow small companies to germinate and do the things the big boys won’t.

The Connect America Fund is the way to do it. The bottle neck is the FCC and it’s allocating monies to the big internet providers which aren’t doing what’s needed. The problem is the laws which constrain the type of company eligible for the funds. They need change. If that happens, the CAF money can get many more players into the action. Competition. It works.

There are many (Like Steve Largent CEO of CTIA, the Wireless Association) who say, “The service you’re getting by existing cable and LTE are just fine. There is no problem.”

Reminds me of truly self serving statements. If you were the fox, would you tell the farmer about the hole in the wire fence?

How can anyone argue against improving our infrastructure? Like this:

Their argument is basically, the status quo is just fine, you’re getting what you paid for. No reason to expect more or better and no reason for us to improve.

Really? If that weren’t absurd enough, then how about this:

“Take a look at your most recent Internet service bill, and think about the fact that people in Hong Kong can get a 500Mbps symmetric fiber connection for just $25 per month, and tell me you’re happy with the way things are.” – ibid

Why am I reminded of what happened with Ma Bell?

Just as “too big to fail” needs to be fixed, so does this.

Source:

http://www.digitaltrends.com/opinion/its-time-to-get-angry-about-your-crappy-internet-service/

http://www.nytimes.com/2013/01/24/opinion/how-to-get-high-speed-internet-to-all-americans.html?_r=0

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February 22, 2013 7:59:59 AM from Elemental Forums Elemental Forums

Yep.   It gets to the point where groups like Time Warner Cable, and AT&T (using ALEC and even the NAACP at times) decide it's better business for them to buy legislators to stifle competition than to actually compete.  Look at how NC has banned municipal broadband, ever since Salisbury and Wilson curbstomped the private competition.

 

If government did things so terribly, why would they have to do that?  Or is it that big business is actually worse than big government?

 

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February 22, 2013 8:04:25 AM from WinCustomize Forums WinCustomize Forums

Wow! I live in a relatively small town in Indiana and even we have fiber optic cable. There is absolutely no excuse why it should not be everywhere in this day and age!

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February 22, 2013 8:15:32 AM from Sins of a Solar Empire Forums Sins of a Solar Empire Forums

I would not compare Hong Kong to the US.... you have to consider average purchasing power. There is also the issues that usually large cities have better infractructure then more rural areas.

 

However, the most important question is...... is there enough of a market to justify the investment costs today?

 

I am not so sure about that...... although being a victim of slow internet (400 Kbps until 3 years ago) there is only so much bandwidth you can reasonably use at home. Now my home village is connected to a fiber optic cable and speed has gone up to 28000 Kbps, with the option to increase to 50000Kbps.

 

Even with only 28000..... most Servers I know struggle to deliver just that. Now, if you have a 500000Kbps line that is awesome... but if the server keeps sending with 20000 Kbps it wont do you any good.

 

I dont see much of applications for such high home bandwith just yet to be honest. You already can watch full HD movies in realtime..... what more bandwidth does the average home user need?

 

Of course if you are one of those people who nonstop download warez, such a line might have its benefits... assuming of course you find a source that is remotly capable of delivering at this speed.

 

For legimate downloads, there is absolutly no reason (yet) to upgrade your line. Legimate downloads wil be usually far more limited by your income than by data rate.

 

 

For the few people willing to pay for such bandwith, the investion cost in infrastructure is not justfified imho.

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February 22, 2013 8:36:37 AM from WinCustomize Forums WinCustomize Forums

Aresiv, you've missed the potential benefits of the higher speeds and cheaper costs. 

The benefits to commerce, science, etc. are obvious.

Not everyone is interested in warez.

As for not comparing Hong Kong? Why not? Look at the speed and cost. That's what this is all about: Not settling for the pony express when faster internet is not only desirable, but certainly feasable... and it will expand the job market as well.

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February 22, 2013 9:23:56 AM from WinCustomize Forums WinCustomize Forums

I'm with Doc on this one. Its a case of why pay more when you can get the same thing for less. Like a dollar store......almost. lol

Seriously though, to stifle competition? Advancement in everything we do is 'based' on competition. That's like cutting your nose off to spite your face!

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February 22, 2013 9:29:03 AM from Elemental Forums Elemental Forums

Quoting ARESIV,
I would not compare Hong Kong to the US.... you have to consider average purchasing power. There is also the issues that usually large cities have better infractructure then more rural areas.

 

However, the most important question is...... is there enough of a market to justify the investment costs today?

 

I am not so sure about that...... although being a victim of slow internet (400 Kbps until 3 years ago) there is only so much bandwidth you can reasonably use at home. Now my home village is connected to a fiber optic cable and speed has gone up to 28000 Kbps, with the option to increase to 50000Kbps.

 

Even with only 28000..... most Servers I know struggle to deliver just that. Now, if you have a 500000Kbps line that is awesome... but if the server keeps sending with 20000 Kbps it wont do you any good.

 

I dont see much of applications for such high home bandwith just yet to be honest. You already can watch full HD movies in realtime..... what more bandwidth does the average home user need?

 

Of course if you are one of those people who nonstop download warez, such a line might have its benefits... assuming of course you find a source that is remotly capable of delivering at this speed.

 

For legimate downloads, there is absolutly no reason (yet) to upgrade your line. Legimate downloads wil be usually far more limited by your income than by data rate.

 

For the few people willing to pay for such bandwith, the investion cost in infrastructure is not justfified imho.

 

This is false, bandwidth needs have vastly increased over the years- look at game downloads for a legitimate use, or streaming video.  Things that weren't big even 5 years ago.   Nowadays, in places with capped internet, you do this for more than 10 minutes a month, you'll be paying $2 per gig, and plenty of high-population areas have this, such as Eastern Canada, and various parts of the US , and the caps are expanding not going away, due to deregulation.

 

If you don't think the broadband companies won't try to get away with this- TWC in 2008 tried to implement a 5GB/month cap in four regions, as a flat-out surcharge.  My area was one of those areas.  What stopped it from happening: threats to create a city broadband service.  How did TWC/AT&T respond- by buying state legislators in NC to ban future cities from doing this for the sake of "competition" (note: there is no competition, if anything there's collusion)

 

Even if your argument about it being unprofitable is correct (and with TWC admitting 95% of their revenue is going to pure profit, your argument flat-out isn't), this would justify government intervention, as this is long-term profitability.  Also look at how Kansas City is going thanks to Google Fiber, and how TWC offers better deals there than anything else in the country.

 

The stifling of broadband by entrenched monopolistic business interests, with the blessing of corrupt Tea-Party led governments (ALEC is hugely behind this), is the biggest consumer rights outrage in the United States today.

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February 22, 2013 9:40:05 AM from Elemental Forums Elemental Forums

I agree in principle, but you can't compare the landmass size, geography, population density, etc. of Hong Kong with the USA.  You can't do that with South Korea, Japan, etc.  Different factors will massively impact infrastructure needs, and thus costs.

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February 22, 2013 9:44:10 AM from Sins of a Solar Empire Forums Sins of a Solar Empire Forums

I'm inclined to agree with Ares IV on this, at least in regards to infrastructure...even at our current state of "slow internet", the servers I interact with are the bottleneck, not my internet speed (which while good is by no means fantastic)...

You would first need to see many servers (those tied to websites that people make large downloads frequently from) increase their own bandwidth....when the "average user" actually could benefit from have significantly faster internet than current high speed cable, that's when it's going to be worth investing in the infrastructure such as widespread fiber optics....

There are some other considerations that we need some perspective on...

The US has a lower population density that most other modernized countries...we are, in essence, much more spread out....that means any infrastructure viable for Europe or Hong Kong or [insert your favorite rich place here] will at the very least be more expensive for us...

Additionally, we need to consider that mobile devices which do not necessarily use broadband internet connections are becoming more and more common....2 years ago I did all my internet stuff on my laptop...then I got an iPhone 4, and now I only use my laptop's internet capabilities for these forums and for ICO...if I were to someday get a mobile device with a larger screen, I'd basically be using my laptops internet for gaming almost exclusively (and there you are really bottlenecked by the server, not your internet speed)...

If I was a cable company, I'd be very wary of massive investments to infrastructure...it is quite conceivable that in the near future many home users won't even need a broadband internet connection (just as many home users now are slowly doing away with landlines for phones)....certainly someone will need landlines for internet, but the demand and the market very easily could change dramatically....

My concern isn't the quality of infrastructure, but the cost....that is where our current system is really failing, and I'd be more concerned about policy changes that lower costs than those improving infrastructure....

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February 22, 2013 9:58:02 AM from Elemental Forums Elemental Forums

Quoting Seleuceia,
I'm inclined to agree with Ares IV on this, at least in regards to infrastructure...even at our current state of "slow internet", the servers I interact with are the bottleneck, not my internet speed (which while good is by no means fantastic)...

If I was a cable company, I'd be very wary of massive investments to infrastructure...it is quite conceivable that in the near future many home users won't even need a broadband internet connection (just as many home users now are slowly doing away with landlines for phones)....certainly someone will need landlines for internet, but the demand and the market very easily could change dramatically....

My concern isn't the quality of infrastructure, but the cost....that is where our current system is really failing, and I'd be more concerned about policy changes that lower costs than those improving infrastructure....

 

This is also untrue, as it has been found that when you make the access, people want to and will use it.   Also, see above on 95% profit margins, what the cable companies want to do is raise rates while lowering service, when free market forces would provide lower rates and raised service (which is the case in much of the rest of the world, we're the only country where it's going backwards)

 

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February 22, 2013 10:14:41 AM from WinCustomize Forums WinCustomize Forums

Good post Doc...bookmarked...

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February 22, 2013 10:18:27 AM from Elemental Forums Elemental Forums

Quoting Alstein,


The stifling of broadband by entrenched monopolistic business interests, with the blessing of corrupt Tea-Party led governments (ALEC is hugely behind this), is the biggest consumer rights outrage in the United States today.
      

The Internet in Canada is generally accepted to be far worse then in the States. While Oligopolistic behavior may factor in to this because such companies are risk averse and slow to move the main reasons are more grounded in science or at least economics.

  1. Areas such as Hong Kong, which is really just one huge city, have much much higher population density then Canada or even the States. That means companies need to install a ton less cable in order to sell their product to millions of people. The profit for stringing a cable hundred of miles to a small town is extremely low.

2. Lots of Asian and European countries have huge government programs for increasing access to the internet. They pay for their internet with taxes.

I’m discussing how the basic principal of Capitalism has failed us: Competition in a free market.

3. Regulating and keeping cable companies competitive is extremely hard because those companies usually own all the cable that they have installed, and competitors would in theory have to install their own cables everywhere which is very expensive. Every new cable system would double the maintenance upkeep and halve and divide the consumer base. This is a huge barrier to entry and thus such markets are known as naturally monopolistic, and are thus not competitive markets at all. In Canada big companies have to let smaller ones rent their infrastructure for a reasonable rate but the internet service provider business is still one that naturally resists competition. 

4. Any market that is as regulated and interfered in as much as this one cannot be called anything remotely like a free market.

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February 22, 2013 10:53:35 AM from WinCustomize Forums WinCustomize Forums

I advocated an effective prod - low interest, long term loans... not subsidies.

I also advocated some thinking on the topic of "too big"... if the big players aren't favored by the FCC, and are forced to break up into smaller companies (like Ma Bell) more competition might just benefit the customers. The cables in that case would be akin to the telephone lines... also, with the public monies used for that stuff via CAF and tax incentives, etc. who really owns those cables?

 

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February 22, 2013 11:55:12 AM from Elemental Forums Elemental Forums

Quoting DsRaider,

Quoting Alstein, reply 7

The stifling of broadband by entrenched monopolistic business interests, with the blessing of corrupt Tea-Party led governments (ALEC is hugely behind this), is the biggest consumer rights outrage in the United States today.      

The Internet in Canada is generally accepted to be far worse then in the States. While Oligopolistic behavior may factor in to this because such companies are risk averse and slow to move the main reasons are more grounded in science or at least economics.

 

If this was actually the case, it would be pretty bad all-around, not massively better in Vancouver and even the boonies in Saskatchewan  than it is in Toronto and Ottawa.

 

Broadband needs to be regulated like the utility it is.

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February 22, 2013 2:18:02 PM from Elemental Forums Elemental Forums

I feel sorry for you guys.

We have flat raet all over Croatia (Southeastern Europe) both mobile and ADSL.

As a bussiness, I can easily get 100$ monthly fixed IP, flat rate with speed of 30Mb/s DL and 4 Mb/s upload.

 

Houses usualy pay 24$ for flat, 4Mb/s DL, and 512Kb/s upload.

 

Our regulating agency raises the bar for providers every two years. We are expecting new surge to 6/1. For the same price.

Also, most caffes and hotels resturants as well as city centers have free WiFi.

 

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February 22, 2013 2:30:48 PM from Sins of a Solar Empire Forums Sins of a Solar Empire Forums

Quoting Alstein,
This is also untrue, as it has been found that when you make the access, people want to and will use it.

Not always...

Case in point, car companies have recently released hybrid models of cars...in some cases these purchases have even been subsidized by the government....

And yet, most people are still sticking to good ol' gasoline vehicles despite hybrid cars being out for years...

For better or worse, the market decided that gasoline cars are better for the vast majority of consumers...giving people access to something does not guarantee they will want it or that it will magically become successful...

Sure, some people drive hybrid cars (just as some people have fiber optic cables)...but most don't, and it certainly isn't due to a lack of competition in the car industry....

Quoting Alstein,
, see above on 95% profit margins, what the cable companies want to do is raise rates while lowering service, when free market forces would provide lower rates and raised service

I shall defer to my previous statement...

Quoting Seleuceia,
My concern isn't the quality of infrastructure, but the cost....that is where our current system is really failing, and I'd be more concerned about policy changes that lower costs than those improving infrastructure....

I have already thrown my support for finding ways to reduce costs for the consumer (more "free market" is one possible way)...

If the free market decides for better infrastructure, then so be that...but pushing for better infrastructure solely for the sake of having better infrastructure is just as silly as any other mandate from a planned economy (or heavily regulated industry)...let investors and the demand make those decisions (and don't assume you know what the market really wants)...

You can blame cable companies and the government for inflated prices, but blaming them for bad infrastructure is a much greater stretch...I'm not saying it isn't their fault, but without a free market to prove otherwise there's no guarantee the infrastructure would drastically improve in the near future just because the industry became more competitive...using a previous example, years of competition between many car companies has yielded only small improvements in fuel efficiency over the years....things like hybrid cars, electric cars, and ethanol using vehicles have not taken off despite being out there for years....

As I stated earlier, a cable company may find that widespread fiber optics isn't economical due to the current growth of mobile devices...

Quoting Alstein,
Broadband needs to be regulated like the utility it is.

You can't argue free market forces are going to reduce rates, then turn around and say they should be regulated like utility companies...

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February 22, 2013 2:58:33 PM from Elemental Forums Elemental Forums

Quoting Seleuceia,



You can blame cable companies and the government for inflated prices, but blaming them for bad infrastructure is a much greater stretch...I'm not saying it isn't their fault, but without a free market to prove otherwise there's no guarantee the infrastructure would drastically improve in the near future just because the industry became more competitive...using a previous example, years of competition between many car companies has yielded only small improvements in fuel efficiency over the years....things like hybrid cars, electric cars, and ethanol using vehicles have not taken off despite being out there for years....


Quoting Alstein,
reply 14
Broadband needs to be regulated like the utility it is.

You can't argue free market forces are going to reduce rates, then turn around and say they should be regulated like utility companies...

 

Well, I want one or the other, not the current model, which regulates higher profits for cable companies for reduced service.

Lets put it this way: there's a reason Europe has much better internet than the US- it's not population density or wealth, but government investments and regulations designed to prevent monopolies.   That's the real problem- we have broadband monopoly, and trustbusting is dead in the US.

 

 

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February 22, 2013 3:03:41 PM from JoeUser Forums JoeUser Forums

Hybrid cars are more expensive than gasoline cars, and there isn't a good secondary market yet.  Also, repairs are more expensive.  Etc.

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February 22, 2013 3:08:45 PM from WinCustomize Forums WinCustomize Forums

Quoting athelasloraiel,
We have flat raet all over Croatia (Southeastern Europe) both mobile and ADSL.

To what degree is it subsidzed by your government?

Quoting Seleuceia,
Case in point, car companies

Really? Cars are the second largest investments people make, therefore apples and oranges. How about a more suitable comparison... like another utility.

You write about a free market and letting it determine the course. The whole point is that currently it isn't a free market. The point is how to get it to become one.

 

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February 22, 2013 3:16:58 PM from Sins of a Solar Empire Forums Sins of a Solar Empire Forums

Regulating ISP's got us into the mess we're in, returning to our regulated environment would be stupid.  They talk about how we used to have great internet a decade back, but they ignore that the only decent internet we had was piggybacked on existing cable networks.  They also ignore that our internet essentially stayed in a static condition for several years while the rest of the world left us behind.

 

We used to regulate competition in, and it killed the drive to advance.  Now we're regulating competition out, and it's accomplished the same thing.  The big companies get free money courtesy of your taxes, and they use it to keep the politicians on their side.  Unless we kill off all the politicians, any regulation will likely advance the problem, not a solution.

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February 22, 2013 3:36:16 PM from WinCustomize Forums WinCustomize Forums

“Take a look at your most recent Internet service bill, and think about the fact that people in Hong Kong can get a 500Mbps symmetric fiber connection for just $25 per month, and tell me you’re happy with the way things are.” – ibid

Not sure you can compare Hong Kong's Internet service to ours.

While they may have faster service for less expense, they also have censorship that limits content.

The major problem with all of this was the Telecommunications Act of 1996 that was signed into law by Clinton. While it looked good on paper, the opposite of the intent happened and the major companies bought up the smaller ones.  

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February 22, 2013 4:10:45 PM from WinCustomize Forums WinCustomize Forums

Quoting CarGuy1,
While they may have faster service for less expense, they also have censorship that limits content.

Looking this up, I found this:  http://news.cnet.com/8301-30684_3-20000905-265.html?_escaped_fragment_=

I remember Google pulling out of the PRC and setting up its search engine in Hong Kong (or routing it through Hong Kong).

The point of the OP isn't to idealize Hong Kong, rather to point to speed and cost. Kansas City and Google's experiment there is just as good.

As for the Telecommunications Act of 1996 - cashing out and leveraged buyouts were the big thing then. I still believe that making money available through low interest, long term loans through the CFA is the way to go.

We need the infrastructure expansion. The jobs created won't be bad either.

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February 22, 2013 7:08:40 PM from Sins of a Solar Empire Forums Sins of a Solar Empire Forums

Quoting athelasloraiel,

Houses usualy pay 24$ for flat, 4Mb/s DL, and 512Kb/s upload.

 
 

I live in small town in central Europe and I have 40/20 down/up optic fiber for 12 EUROs per month. No FUP. Fucking yes. 

BTW i dont think there are any subventions by government over here, not regarding internet at least. It actually seems to be a competition, just a year ago, i was still on 2Mbit DSL for 18 EUROs per month, provided by local Telecom company (which is partially owned by Deutsche Telekom)...and there wasnt really any better alternative. Until these guys, called Digi, showed up with the aforementioned deal, which was really difficult to turn down. They are i believe a Romanian company by origin and they are quite new over here, so i suppose they try hard to take over customers from existing companies...and they do it well i have to say. So they can have my money and Telecom can fuck off. 

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February 22, 2013 8:35:55 PM from WinCustomize Forums WinCustomize Forums

The OZ experience ...

We had a company, Telstra, in charge of telecommunications in Australia which was run by the government, a huge company which basically had all of the copper and phone networks. Around twenty+ years ago a conservative government decided to privatize it, so there will be 'greater competition' in the market, prices will go down and there will be a greater choice in the market. The people of Australia didn't want it to happen, it was our company, our infrastructure and we were happy about the status quo ... and we knew it was a cash grab by the government.

Anyway it was floated and privatized. The company, like all companies, didn't want any competition and because it had the copper wires made it hard for other companies to compete.

Further down the track ... after price increases, poor maintenance to the infrastructure and terrible customer services ... the new government wasn't happy how we were left behind and wanted to upgrade our network to the digital age with optical cabling. Telstra was making a fortune out of the old copper network and didn't want to invest into new infrastructure, why should they, profits were good, no real competition (only in the mobile market, just). They told the government to go and jump.

After many years of fist shaking ... the government made a new company to lay down the new optical network, Telstra came on board when they thought about all of the money they will loose and is now helping the government. The cost will be huge to the tax payer in the short term, the network will pay for itself in the future and we will get the infrastructure Australia deserves. Although the conservative opposition wants to scrap it and put in a 'faster' (??) network based on mobile technology...

We never wanted Telstra to be sold off in the first place, we want a optical network and yet powerful people, with a strong ideology, keep telling us how private companies do to right thing for our country ... no they don't, they look after themselves.

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February 22, 2013 8:42:45 PM from Sins of a Solar Empire Forums Sins of a Solar Empire Forums

Just to talk about North Carolina again, a list needs to be made on who is in the pockets of Time Warner and ATT. And vote them out of office, what they did is about the same time Chattanooga, TN brought in Giga speeds and were the fastest in the country till Google came in to Kansas City KS/MO. Yea Google, yeah the snoop you emails so they can sell you stuff, but who doesn't these days...

Where I live in the North East, everyone overlaps, Verizon, Time Warner, Cablevision. Google is forcing competition which is good for all of us in the long run, better service speeds at lower cost to the consumer. But the downside is it is going to be a while before Google wires up the US....

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February 22, 2013 10:07:52 PM from WinCustomize Forums WinCustomize Forums

Quoting tazgecko,
We never wanted Telstra to be sold off in the first place, we want a optical network and yet powerful people, with a strong ideology, keep telling us how private companies do to right thing for our country ... no they don't, they look after themselves.

Because of the laws... and the financing. Optic cable isn't cheap. The only way to finance it is via the government or a consortium. Did anyone ever try to put one together?

Did anyone bother to bring suit on the grounds that the company has to buy out what it owes to the people of Oz for the equipment and lines?

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