In most of the US, you have a choice of one or two wired broadband ISPs anyway. I imagine most renters don't care about competition, since they know they wouldn't have much of a choice no matter where they go, and if they're in an area with two choices, they're likely to be equally crappy.
ISP competition is important, but I see this as a symptom, not a cause. Fix the root problem, and people might start caring about ISP choice. Once renters care about ISP choice, big landlords will fall into line.
> ISP competition is important, but I see this as a symptom, not a cause. Fix the root problem, and people might start caring about ISP choice. Once renters care about ISP choice, big landlords will fall into line
Depends on where you live. In NYC, Verizon promised to provide fiber to the entire city several years back (and there is currently a massive legal dispute with the city because they've fallen incredibly short of delivering on that)[0]. It's particularly apalling because Verizon didn't even have to build out most of the fiber - the city already had a dark fiber network covering large portions of the city.
I'm one of the unlucky ones. Verizon has fiber running right in front of my building - other buildings on the block already have Fios. However, Verizon refuses to provide Internet to my building unless they can also provide TV service as well[1]. The landlord has given Time Warner Cable the exclusive rights to provide TV service in my building, so that means that I'm stuck with only one choice, even though it's technically a "competitive" market.
So, this issue is both a symptom and an exacerbating cause pf ISP non-competition. At least in NYC, exclusivity agreements make it much easier for the local monopolies[2] to pretend that they aren't blocking competition, when in reality they've carefully drawn lines around their territories and have a "gentleman's agreement" not to encroach on each others'.
If landlords didn't (or couldn't) receive kickbacks like these, it'd be much harder for them to maintain this illusion.
[1] This is not hypothetical; I've called up their offices more than once and confirmed that this is the blocking step before they schedule a date to hook up the building.
[2] TWC, Comcast, and Optimum have exclusivity rights to buildings all across the city.
Cities using TV franchises to block competition and extract tithes is a huge part of the problem. Verizon wanted to wire up Baltimore with FiOS. Baltimore refused to give them a TV license. The economics of FiOS don't really work out without TV service, so nobody got FiOS except a few luxury buildings that were easy to wire up.
> Cities using TV franchises to block competition and extract tithes is a huge part of the problem
I can't speak to Baltimore, but in NYC, it's the landlord that's responsible for this, not the city.
> The economics of FiOS don't really work out without TV service
I can sort of buy that argument in areas where they have to do all the buildout themselves, but in New York, Verizon was handed the existing fiber network that already ran past people's doors. Then Verizon has the gall to claim that they've fulfilled their obligations of wiring the city because 'everyone has fiber running past their door', even where they did literally no work and simply sat on the fiber that others had already built for them.
Do you enjoy Verizon press releases? "Miles ran", "houses passed". Industry doublespeak. NYC residents invested those billions via rate hikes the PUC granted to Verizon!! It was subsidized even though Verizon claims otherwise. And they didn't deliver.
I trust public company press releases that commit to concrete numbers: there is a cottage industry of plaintiffs' lawyers that bring securities class actions for material misstatements of financial information.
NY residents didn't invest anything in fiber. Verizon got rate hikes because it has been losing billions of dollars a year in NY. Nationwide, Verizon's wireline profit margin is in the low single digits--it's utterly ridiculous to say they're receiving a "subsidy" in the form of above-market monopoly prices.
As I mentioned in my original comment, New York already had fiber networks covering large parts of the city. Verizon was able to access these, which already "ran past" many buildings in the city (including mine), and still never bothered to hook up those buildings as they had already agreed to.
They wanted to wire up Baltimore in the same way as any company that wants to sell a product: to customers it can turn a profit from. In a place like Baltimore, Fiber is simply not viable if providers must wire up the vast swaths of the city that can't afford to pay for service. Google refused to do it too, and Baltimore has had no takers on its fiber proposals.
More generally, forcing companies to cross-subsidize from richer areas to poorer areas is destroying fiber rollout nationwide. It's a tax on fiber subscribers, and like any tax it discourages the thing being taxed. It's effectively a ban on the only sort of business model that could create competition with incumbents: deploying gradually to the areas offering the greatest return first. There is a reason why Google won't bring fiber to cities that impose build out requirements, and why it got rid of the free tier in Kansas City. The math simply doesn't work.
It is not a ban on anything. It is making sure that poor neighborhoods don't get left behind again. Things like this are not things that should be left up to the free market, otherwise you end up with rich neighborhoods having lots of service, and middle and poor neighborhoods having next to nothing.
> Things like this are not things that should be left up to the free market
Municipalities incorrectly assume they have a choice whether to leave things up to the market. In reality, the market operates whether they like it or not, and simply adds the cost of serving unprofitable customers to the "cost" side of the equation when deciding whether to build service in an area. That's why even Google won't build in cities that impose build-out requirements.
Cities think they can wire up impoverished neighborhoods "for free" when in reality all they're really doing is creating a large tax on fiber deployment,[1] and using the proceeds to serve lower-income neighborhoods. But when you tax something, you decrease demand for it (which is why we tax cigarettes). Taxing fiber is incompatible with the idea that you want to encourage fiber deployment.
[1] It's also a tax that's quite regressive. A middle class family with fiber pays the same amount of "tax" to subsidize fiber for low-income areas as a rich family. It'd be better to just increase the city income tax and pay for fiber directly.
> Things like this are not things that should be left up to the free market, otherwise you end up with rich neighborhoods having lots of service, and middle and poor neighborhoods having next to nothing.
To clarify, the alternative isn't really a free market approach either (since Verizon was seeking a de facto exclusive, monopoly status).
There is a free market approach to solving the problem you describe as well, but what Verizon seeking was almost the opposite of that.
Verizon was not seeking either a de jure or a de facto exclusive monopoly. Comcast already serves the whole city. Indeed, they did wire up a number of buildings downtown. Because the city wouldn't give Verizon a television licenses, those buildings invariably offer Comcast alongside FiOS.
I'm one of the lucky ones. I moved into a brand new building in queens ~6 months ago, and though the management company said it was ready for both Time Warner Cable and Verizon FiOS, when I called Time Warner (to move my existing cable plan to my new place) they didn't even have the address for my building in their system (to their credit, the building was an empty lot on google street view). Verizon did, so I jumped ship. Installation literally took an entire day, but now I've got 100 Mb symmetric, though I actually get closer to 120. And, the hardware is nicely hidden away in an embedded alcove in a closet.
As an aside, i've only got internet, I will never pay for a cable tv subscription again.
Typically there are four consumer level providers in US markets. One coax, one copper/fiber, one (or more) satellite, and most likely a regional operator that may be either copper/fiber or coax. Also some regions do have consumer-level WISPs, although those are more rare in urban areas. Webpass being a high profile exception.
The problem is you can't get the standard Comcast or U-verse product in those buildings. The landlord signed a 10-year deal stating "10mb/s" per unit. Meanwhile your neighbor in a non-exclusive building gets 75mb/s easily for the same price or even less than you're paying under the exclusive agreement.
Worse, a lot of these buildings sign deals with no-name local fiber providers (or resellers) who pull the same crap, so its not a "big business won't let us compete" issue as much as it is lack of choice for residents due to existing contracts by the property owner.
Satellite is terrible and doesn't really count. I've never heard of someone using satellite unless they literally have no wired ISPs available. IMO it belongs in the same category as cellular internet.
According to this report, in 2013 only 28% of US households had three or more providers capable of giving 10Mbps service, and 24% only had one:
If you raise the bar to 25Mbps, then only 9% had three or more, and nearly half only had one choice. That's 2.5 years old, but I don't think it has changed all that much.
Maybe they offer even worse services in these buildings, but I bet that in areas where they have a monopoly simply because of no competition, I bet it's pretty bad too. It certainly was for me when I lived in such an area.
Those surveys include all of the US's massive rural areas. In urban areas there's more choice and much higher speeds. 80% of the population lives in urban areas.
I think its important to keep that in mind when reading surveys like these. Just because some guy who chooses to live in the middle of nowhere gets only 1.5mbps DSL doesnt mean I can't get 100+mbs in urban areas. I'm currently on a 100mbps in Chicago with AT&T and Comcast soon releasing their consumer-level gigabit fiber product. Other cities have the same or better, like Kansas City's Google fiber.
Its dishonest to say that high-rise renters in urban areas should think 10mbps is competitive. Its not remotely so.
This also cuts both ways. I know a building serviced just by RCN and every tenant gets 100mbps and a bunch of channels for a good price. Its a mixed bag, but usually leans on less competitive products.
If 80% of the US population lives in urban areas, and 50% of the US population only has one choice for 25Mbps service, then that means at least 37% of the urban population only has one choice. If 72% of the entire US population had at most two choices for 10Mbps, then that means at least 65% of urban dwellers do.
> The landlord signed a 10-year deal stating "10mb/s" per unit. Meanwhile your neighbor in a non-exclusive building gets 75mb/s easily for the same price or even less than you're paying under the exclusive agreement.
Units with no better than 10Mb/s service should let for significantly less than otherwise-equivalent units with 75Mb/s, significantly less given modern Internet usage.
There may be folks who are willing to give up some about of bandwidth in order to save on rent; it would be unfortunate if that choice were taken away from them.
They're not going to be saving anything. If these agreements cut the rent the landlords could charge, they'd never sign them. All this does is trap people who failed to investigate beforehand.
Good point. However, nothing about these agreements makes anything fundamentally cheaper, it's just shuffling money around. In the best case, the kickbacks reduce rent, people's internet bills increase, and they pay the same. If the internet is cheaper because it's slow, then it could be cheaper and slower anywhere.
Since none of this fundamentally cuts costs, you end up with a zero-sum game. There are four basic possibilities: either the ISP miscalculates and loses more money on kickbacks than they gain from renters, the landlord miscalculates and loses more money in rent than they gain from kickbacks, the renters miscalculate and lose more money on their internet bill (or lose more value due to having crappy internet) than they gain in rent savings, or everything manages to balance out perfectly and this is just a bunch of wasted effort. Since the renters are by far the party with the least information and the least ability to analyze the situation, it's highly likely that they're the ones who end up being screwed.
A competitive rental market is something that rarely exists. In most of the cases I've heard of, the demand is much greater than supply, so the landlords are free to charge whatever and if you don't accept, there are 100 other people in line for the same apartment.
Here in Seattle, whenever one of my intern friends would move in, we would first tell them to look for apartments with wave/condo internet. 60$ a month, no contract or installation fees for 100 Mbit per second internet. It hasn't gone down once in that past 4 months nor ever slowed from that speed (I can also spend an extra 20$ a month to get 1 gbit per second).
ISP competition is important, but I see this as a symptom, not a cause. Fix the root problem, and people might start caring about ISP choice. Once renters care about ISP choice, big landlords will fall into line.