AT&T to cap broadband usage. Streamers beware

Perhaps it should be mentioned that this conversation is based in the USA? I wonder if they have this problem in Finland or South Korea. I would be surprised if they did.

Metrization of a free resource (the cable is already laid down) is only meant to extract more money from the end user. It's not like they're going to pay fantastic salaries to the cable guy, either.

These machines now can handle huge bandwidth and CHEAP. The problem is the monopoly over the cable. If it was owned by the public instead of Wall Street, well, you might get the same level of service as in Helsinki.

Trebejo,

I'll disagree - pretty strenuously, actually. These assets (telecom for regulatory purposes) have historically been in the hands of publicly owned or regulated utilities. As a result, they were horribly mismanaged and the public paid the price.

Once the sector was privatized and opened to competition, prices dropped like a rock. There should be no doubt about this - it was specifically as a result of private sector competition. In fact, prices dropped so quickly and steeply that a few of the highly levered companies which laid the fiber went bankrupt.

If these assets were in the public sector, you can bet anything that high speed service would be sparse, hard to find and very expensive.

We've been there, no one should want to go back.

Marty

Incidentally,

I should add that one of the examples you cite (South Korea) is illuminating. South Korea has effectively fostered competition in the deployment of high speed connectivity by aggressively forcing the last mile monopoly (Korea Telecom) to open its local access ("unbundle the last mile") to bandwidth providers like Hanaro. To my knowledge, South Korea has by far the least regulated Telcom sector in Asia. Additionally, a fair chunk of South Korea's subsea fiber was developed (and to a lesser extent provided) by private entities like the Asia Global Crossing/Dacom JV.

Honestly, I am much less familiar with the situation through most of Europe, and I definitely can't comment on Finland. However, there are so many factors - ranging from the aforementioned last mile legacy, to geography, population density, etc. - that such comparisons are very difficult in any circumstance.

Marty

Hi Marty,

I'm somewhat curious regarding your assessment of Wall Street performance...is it too large to fail?

Best regards,
Sam

Sam,

Not remotely.

I have no particular philosophy regarding public ownership/regulated business versus unregulated capitalism. There are benefits to each. Stability vs. efficiency. People want the upside without the downside. Sadly, that's not how the world works. Free markets bring upside, but volatility. Regulated markets are more stable, but kill the upside.

My guess is that most people are happiest somewhere in the middle. Fine by me, either way.

However, I have personally financed (to the best of my knowledge) more fiber than any other individual on the planet. I know the history of these assets better than I want to.

My comments reflect the history of ths business as I understand it - but they certainly shouldn't be taken as an endorsement of free markets at all costs. Rather, I'm just pointing out that the development of low cost digital distribution is a direct result of privatization. Having lived thru the transition from public to private, I don't think that this fact - FACT -should be subject to debate.

Marty