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AOL Picks Cable ISP Partners 163

Posted by michael from the oligopoly dept.
You may recall that when AOL and Time-Warner were permitted to merge, a few conditions were placed by the FTC. One of them is that AOL must permit a few other ISPs to offer service over all of the cable modems owned by Time-Warner. AOL lied to the regulators and said that "technical difficulties" prevented them from permitting open competition among any ISP that wanted to offer service; instead AOL will carefully choose a grand total of three other ISPs to offer service. Well, they've put in the paperwork - Earthlink, Juno, and High Speed Access Corporation. AOL is of course the nation's largest ISP; Earthlink is second; Juno is third; HSA is another huge cable modem company. AOL has financial dealings with all three - that is, they're already in bed together, partners, not competitors. You can guess that they're going to be competing *wink*wink* fiercely *wink*wink* to offer you the best price {snicker}.
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AOL Picks Cable ISP Partners More

AOL Picks Cable ISP Partners

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  • MSN is #2, not Earthlink (Score:1)

    by Anonymous Coward
    Earlier this year, MSN surpassed Earthlink as #2 by reaching 5.4 million customers and continues to grow. All this talk of competition and AOL does not strike a deal with their closest competitor, Microsoft. Is it hard feelings about AOL IM or just industry standard practice of selective competition?

    -David

  • Re:MSN is #2, not Earthlink (Score:1)

    by Anonymous Coward
    EarthLink still has more paying subscribers. And AOL counts additional email addresses as their 'active members'. At last count, they actually had something around 12 million paying members, but 20+ million email addresses..

  • Re:Earthlink has already been approved (Score:2)

    by Anonymous Coward
    Using my version of Adobe Redactobat Reader, I was able to recover the redacted portion:

    The Consent Decree allows this to happen as soon as AOLTW and Earthlink are ready to go forward, which we expect to be ROTFLOAO, when hell freezes over.

  • The result of the merger between Juno and NetZero is #2, MSN is #3 and Earthlink is #4. Earthlink says they're still #2, though, because they only count paying customers.

    --

  • The answer to this, of course, was open-source Linux. Now who is MS's biggest competitor? If you read *any* tech news, you know that it sure as hell isn't Apple or IBM.

    Um, hate to break the news to you, but by the end of the year Apple will be the single largest vendor of a UNIX-based operating system, shipping more copies than RedHat or Sun. I'm not sure how the numbers work out when you take free downloads into account, but I'm pretty sure it's still in Apple's favor.

    --

  • Which means that AOL was in fact correct in claiming that they could not open up their service to unlimited other ISPs, but only a certain number, and it was michael, not AOL, telling the untruths...
  • The problem is that a pair of channels (one up, one down) is needed for each ISP, to keep their networks from interfering with each other. As there are not an unlimited number of channels, AOL cannot allow an unlimited number of ISPs to use the network. The situation with DSL is much simpler, and does not have these problems.
  • Obviously the real mission statement of the OpenNet coalition is "Open my competitors' net, let me in, close it behind me".

  • We had contacted Time Warner when the terms of the merger were being dicussed with the FTC. Time Warner said it was anxious to let independent ISPs (even small ones like ours) onto it's cable networks.

    We were being offered some interesting opportunities. We'd effectively be allowed to sell bandwidth over TWNYC's RoadRunner and market to the entire NYC area. Since ADSL is pretty shitty, we would have been glad to offer NYCT.NET brand cable to our customers.

    If I'm clued in correctly, Time Warner stopped returning our calls once the merger was complete.

  • I'm still wondering how they are implementing this competetive access.

    Is there anybody using the network in Columbus (trial area) that cares to comment???
  • You're totally right, I've read a lot of criticisms on the 3 competitors being picked but I didn't see anyone offer better alternatives. As far as I know, there is not a fiercer AOL competitor than EarthLink out there.

    EarthLink has always positioned itself as the clear alternative to AOL by always offering far superior services at lower prices than AOL, may it be dialup, broadband or wireless, if that's not competition, I don't know what is!

    Now just because AOL is looking to strike a financial deal with EarthLink and other ISP's to share pipelines doesn't mean any of this is going to stop. There are tremendous costs associated with sharing cable lines due to the fact that they cannot be abstracted into various layers like dialup and DSL and this forces all parties in the game to financially cooperate at some level so those costs are fairly spread out. That's what I believe those deals are all about.

    But in the end the competition will still remain fierce and AOL will have to be on its toes, especially since EarthLink has been *extremely* aggressive in the broadband market, offering a far wider array of broadband and mobile connectivity options than any other ISP out there: Case in point ... [earthlink.net]

  • ... here ... [earthlink.net]. Pick how fast u wanna get connected, then sign-up. cake.

  • There will at least be two survivors to AOL's monopoly: EarthLink and MSN. Both financially sound ISP's. Now I don't know what the future holds in terms of mergers but that should at least give us a worst-case scenario of ONE very strong competitor to AOL. I'd say that's already pretty darn good considering how hard it is for a company to survive in the ISP market and make it to profitability.

    People gotta understand that being in the ISP business is *very*, *VERY* expensive and it's extremely hard to survive in it.

    Soon internet access will be just like any other "utility" in your home. But unlike local phone and long distance service, or electricity or water, activating "internet service" and maintaining it for the average user is far more complicated than flipping a few switches. You can't just tell non-internet-savvy users "OK, we activated your internet dialup or broadband account, you're ready to go". As an ISP, and to provide the best "internet experience" possible to the user, you have to provide the average user with very compelling software that supports a wide array of hardware platforms and operating systems to connect a user's computer to the internet. But that often doesn't go smoothely so you have to have a staff of highly trained technical support. Even when the average user gets connected, a lot of them don't know what to do on "this internet thingy", so again you need technical support to hold their hand so they value your service and continue using it. Even if the user encounters problems that are not the ISP's fault, most users only see that they can't open their browser and "YOU NEED TO FIX IT NOW!".'

    The bottom line is, being an emerging ISP means survival in a very harsh business, filled with frustrations and miscommunications, where ISP's often have to compensate for the weaknesses of operating systems and mainstream internet software with their own technical support and custom-built software. To be a successful ISP that doesn't just cater to "elite users", your organization must be extremely proficient in an wide array of disciplines and all that comes at a cost of hard-earned lessons, experience and ... MONEY.

    Now you're talking about "Open Source" internet access by setting up Wireless LAN's everywhere? Hey I'm all for that and I'll be first to join. You still will *never* connect the average user. And if you're basing yourself off of the 802.11b standard you're opening another huge can of worms on privacy and internet security. Make sure you think it through.

    Offering internet access to the masses is far from being all about picking with which network standards users will connect. You can write compelling open-source software at the only cost of your time and grey-matter then distribute it to the rest of the community so more programmers can enhance it, but offering internet service to the masses will cost you a whole lot more than that.

    It is not all about technology.

  • Re:Screw the cable monopoly network! (Score:3)

    by Perrin-GoldenEyes ( 4296 ) on Thursday July 05, 2001 @05:46AM (#106938)
    I think the barrier here is the astronomical start-up cost of laying new cable. That's one of the reasons why DSL companies have to rent space from Verizon et al instead of running their own loops.

    Cheers,
    Perrin.
  • If you look at the cost breakdown of a multi-company service, you'll find that the carrier makes the bulk of the money. I have DSL at home, and I found that of the $50 per month that I pay, the carrier (Verizon [verizon.com]) gets $35 of it, and my ISP (Acecape [acecape.com], who I highly recommend) gets the other $15.

    AOLTW really has nothing to worry about here -- if anything, it means they get a good sized chunk of lucrative wholesale business. And they picked a good bunch of partners -- companies like Earthlink pride themselves on providing little more than raw connectivity: a market segment which has very little intersection with AOL's customer base. The typical AOL customer is unsophisticated and wants to have his/her hand held through the entire online experience.

    Possibly most important of all is that this arrangement conveniently excludes Microsoft from the picture. MSN is the biggest threat to AOL right now, and since AOL is one of the few companies left that can hold its own against Microsoft, seeing them remain strong is vital to the industry, whether you use/like their services or not.
    --
  • So, genius, where do I sign up for the alternative cable modem ISP provider? Guess what, there isn't one.


    -----------------------------
  • Competitors should build their own networks, such as 100Mbit or 1Gbit Ethernet-to-the-home, and leapfrog the cable monopolies. If there are any government regs preventing them from building the plant, which governments often grant in exchange for a cut of the take--er, "franchise fees", attack those!
  • Yes, laying new cable is expensive, that's why the cable companies get cranky when they're forced to share their cable plant with rivals that aren't $billions in debt.

    However, a credible threat of a competitor laying new cable may prove to be enough to convince the existing cable company to open up their network. It's hard to say, since so far competitors have been more interested in suing than engineering.

    Eventually, though, the existing cable plant will need replacement anyhow. 1.5Mbits over fiber/coax hybrid is nice now, but we'll choke it soon enough. The company that does the new build doesn't have to be the incumbent. And as other posters have noted, there's always wireless.

    And a big ,,!,, to the twits who keep modding down my posts!
  • Finally a voice of reason. The FTC shouldn't be telling AOL how to run its business. Besides, the government is the biggest monopoly around-how come nobody is calling for its breakup?

  • I'm not an AOL fan, but.... (Score:5)

    by trims ( 10010 ) on Thursday July 05, 2001 @06:21AM (#106944) Homepage

    ...They are certainly correct in that opening their network is not anywhere as simple as the Telcos and DSL people. For telcos and the DSL providers, they have a very distinct Layer 2 vs Layer 3 division here. The link from the End-User to the local CO is a point-to-point link; that is, unshared. The ISP can then tap into the data stream at one of several points (the closest being the local CO, the farthest being a long-distance backhaul). The bottom line here is that DSL/T1/T3 connections can all be made at the Layer 2 level, with no consideration for IP numbering. That makes it easy for ISPs to compete, since they bear the cost for all layer 3 equipment, and can differentiate their products that way.

    With cable modems, however, the medium is shared. The best (albeit a inadequate one) analogy is that every cable modem is a workstation on a old thinnet (10Base5) ethernet network, with IP information assigned via bootp. While it is possible to have multiple IP ranges assigned on a local neighborhood loop, it can get real messy real fast. Also, a large amount of the Layer 3 hardware will be (and realistically, should be) provided by AOL, so they bear a large amount of costs that would otherwise be done by the ISPs. Thus, it's far harder to differentiate one ISP from another.

    It's possible, and I definitely think we really need to make sure that cable providers compensate the public for their locally-granted monopolies, but it's not anywhere as simple as with the telcos.

    -Erik

  • heh.

    Sucks to be them... UOL.com [uol.com] is owned by a well-known south-american ISP, and Unitedonline.com [unitedonline.com] is owned by United Airlines.

    There goes any intuitive/impulse recognition...
  • The fact that I have a broad (haha) choice of ISPs to use with my DSL circuit and that I can choose one with a sane TOS which will allow me to run the services I want is worth the slight price difference and the potential of having a slightly slower connection in real world situations.

    If I want to, I can choose an ISP that treats me like I am an important customer, rather than having to go through AOL/TW's call centers. This is worth a lot to me.

    -B
  • What three would be OK then ??

    What would be OK with me would be if the FTC hadn't limited it to three, but let any ISP that wanted in to compete, just like the situation with the DSL providers today. Each ISP would of course be responsible for their own costs of equipment/leases/whatever.

    If that were to happen, I would seriously consider cable over DSL. The main objection I have to cable these days is the less-than-favorable TOS that AOS/TW has.

    -B
  • Looks like they avoided that possible problem by scanning a paper version of the text. So a 42 page black and white text pdf is over 2.5 MB. Argh! At least they could have OCRed it.

    --
    I hope we shall crush in its birth the aristocracy of our monied corporations ...
  • "Can you say 'Wireless'?" Uhh, sure. But how is wireless going to save the world from ISP monopolies? You don't actually believe that the wireless industry is some Open-Source (huh?) paradise do you? If anything, the wireless industry is just as bad as the ISP industry, especially if you live in a semi-rural area.
  • Too bad that there is no competiton in the cable market. You use the cable provider that serves the area you live in. The only way you can choose a different provider is by moving, not a simple and easy thing to do.

    --
  • True, I could go for dish service. But, I like having the clear local channels, which weren't available until very recently through the sattelite providers here. Plus, I REALLY like my cable modem (@HOME). On a good day, from a good server, I can get 350kBps plus, coming close to double a T-1. Downloading a full kernel tarball in under a minute is nice.

    --
  • You know what gets me is when the FTC put basic restrictions on them when they merged that clearly states this corporation is so big and has so much control it must be regulated.

    Problem with that is they are merged forever. What happens when new technologies come along that they can totally leverage to there advantage. FTC won't be able to do squat other than antitrust suits which take forever.

    Merger should never have been allowed. The FTC's restrictions are an insult to the publics intelligence.
  • Too bad that there is no competiton in the cable market. You use the cable provider that serves the area you live in. The only way you can choose a different provider is by moving, not a simple and easy thing to do.

    I don't see this as being a permanent situation. First of all, you really do have the option of going with a dish. Second, competition with satellite TV (and other factors) have lead to the construction of much more flexible and capable digital cable systems. These days, this only means that you get the ability to fork over an absurd amount of money to EvilCable Inc. for "digital service", but down the line, I expect that people will realize that they can (and should) expect such a system to support multiple providers over a single cable.

    Until then, just don't watch TV. It's not like there's much of anything *good* on these days...

  • You forget that most college kids are the ones providing the files to share, and most colleges turn a blind eye to such practices.

    Probably true on the "who is sharing files" part, but not really true on the "blind eye" part. I know that here at Mizzou they do not really care who *downloads* files, but that they certainly do everything they can to prevent people from sharing and/or serving other files (e.g., napster; note that they do packet analysis to defeat this, not just silly port-blocking). And the reason for that isn't (really) just to be killjoys, but because *before* they did this, almost all of the available bandwidth going off campus was used for this kind of thing, and it really just isn't the mission of the university.

  • it's not illegal to have a monopoly. If you remember there used to be no choice in local phone service and cable TV, but the prices were still reasonable. A monopoly only becomes a problem when the company exploits it. For instance, Microsoft became an illegal monopoly when it tied its monopoly product (the OS) with a new, competing product (the browser) in order to give it an incredibly unfair advantage.

    As long as AOL behaves (stop laughing in the back please!) they can have a monopoly and it's legal.
  • There are a whole bunch of other routers out there. Cisco just makes the best ones and has the best customer service. As good textbook capitalism predicts, they completely dominate the market.

    -B

  • Earthlink has already been approved (Score:4)

    by jaa ( 22623 ) on Thursday July 05, 2001 @05:41AM (#106957)
    the request is just for approval of HSA and Juno.

    the petition [ftc.gov].

    The annoying part is that the petition is redacted. When did this stuff become state secrets? Telling us when AOL will roll out Earthlink will blow the whole multibillion dollar empire? Ughh.

  • More importantly, will any of them offer static IPs and a decent upstream? My DSL is bound to drop out from under me sooner or later, and if I wanna keep hosting my site/ftp/etc I'm gonna need these things...
  • To be more precise, Road Runner has always been a separate entity than AOL Time Warner; they license the animated characters
  • OK, I haven't checked out the numbers for Cable, but I provision DSL for a living, and your numbers are WAY out of whack.. As a note, I have a cable modem at home, and the best I can get is 1.8Mbps.

    DSL bandwidths are typically in the range of 144kbps-1.5Mbs

    All the gear that I've used (Paradyne, Cisco, and 3COM) goes from 512Kbps to 8Mbps, depending on distance to the CO. That's quite a difference from your numbers. We only do business accounts (no bandwidth cap), but the local telco here caps "residential" accounts at 4Mbps.

    I realize that you're just making a generalization (and that you know that it's a generalization,) but I've never seen DSL gear that has a max. speed of 1.5Mbps; Can you tell me which equipment you're quoting?
  • Why don't we just sic ole Ted on these bastards and blow some of them straight to hell? On a more serious note, wasn't this kind of thing exactly what our country dealt with around the turn of the (last) century? Lee

  • aren't bigger corporations able to do more business, and thus have lower margins on each individual sale, and thus have the lowest prices of all?!

    the pwesident says big corporations our are friends!

    :(
    ...dave

  • he is a specimin of the type of vermin which bill gates is also a member..

    greedius weaselium

    ;)
    ...dave
  • More importantly, will any of them offer static IPs and a decent upstream? My DSL is bound to drop out from under me sooner or later

    At which point you will be free to chose DSL service from your local phone monopoly.

    - Scott
    --
    Scott Stevenson
    WildTofu [wildtofu.com]
  • well, road runner == AOL/TimeWarner (warner bro's cartoons, roadrunner/coyote, get it?) so that's not much of a competition, is it? Anyway, @home is only in areas where rr.com isn't, so it's not much competiton at all.

    luckily roadrunner is still pretty decent even after AOL took it over, so hopefully they'll keep the two seperate for a bit longer.
  • Its the railroad monopolies again. They own the rails and decide what goes over them at what price. They end up controlling distribution of products, then products, then the towns the railroads go through.

    When newspapers, music, tv,movies being sent to movie theaters for digital projection, stock market quotes etc etc etc all go over the same rails...uhm cables and a few companies control the cables, then they will control the content, the businesses that provide the content and evetually the people who use the content.

    Bad news.
  • Oligopoly!
  • I'm South African. I've lived here my entire life ( 25 years ), and I can promise you that we have *never* had any cable service at all here. Not cable TV, and certainly not broadband Internet feeds.

    There are a few dialup ISP's here ( WorldOnline, ABSA and M-Web to name a couple ). There are also a couple of satellite services. However, there is not one single cable company, and there never was one. We don't have any ADSL either.

    I think you must be confusing South Africa with some other southern african country ( although I very much doubt that they had any cable providers either ).

    Best Regards,
    Peter Knowles
  • I run Comcast@home at home. On a regular night, I can't download faster than 252Kbps. On a rare occasion I'll hit 400-500Kbps. I can understand the 128Kbps upload cap. The network is clogged as it is and we don't need people trying to run large ftp or web sites to slow it down more.

  • Our former national (shrug) phonecompany also makes this kinds of deal to "regulate" the market.

  • Re:Monopoly? (Score:3)

    by mjh ( 57755 ) <(moc.nalcnroh) (ta) (kram)> on Thursday July 05, 2001 @07:24AM (#106971) Homepage Journal
    There's a BIG difference between cable and DSL access speeds!

    Hmm... my cable modem is capped at 2.0MB/s download. DSL is available at 1.5MB/s download. I would agree with you, if the difference were what it used to be (prior to the cap). It used to be closer to 6-7MB/s download. Since the cap, though, the difference seems pretty small to me.

    With that small difference in speed, and due to restrictive appropriate use policies on the cable modem (i.e. no web/email servers allowed), I've been considering switching to DSL. I realize that it'll be slower, but not that much slower, and for the ability to legally run servers, it's something that makes me pause and consider.

    The fact that I can make this switch, relatively easily, and say to the cable company that I don't appreciate their appropriate use policy, suggests to me at least that the TW doesn't have a monopoly in broadband services in my area. Am I wrong? Should I be concerned?
    --

  • Re:Hype! FUD! (Score:3)

    by mjh ( 57755 ) <(moc.nalcnroh) (ta) (kram)> on Thursday July 05, 2001 @09:32AM (#106972) Homepage Journal
    Careful with that FUD you're slinging around there... Sure Cable has a higher peak bandwidth potential but neither you nor anyone else will ever actualize that potential...

    Now wait a minute here, you're slinging some FUD, too.

    Cable bandwidth is a shared resource, meaning that 10Mb/s is the most that can be flowing into or out of your neighborhood/apartment at one time. Furthermore, the bandwidth your modem can theoretically support is never the bandwidth your ISP will allocate to your area - typical individual cable connections are capped at around 500kb/s down and many are capped ridiculously low (in the order of 50kb/s) on the up side.

    Yes cable is shared bandwidth between the end user and the cable company's equipment. And yes DSL is dedicated between the end user and the CO. But, all internet services make use of shared bandwidth . So if your DSL provider does not have enough bandwidth from it's provider, it will have exactly the same problems that you proclaim that only cable modem is susceptible to.

    Now, I can't speak for every cable modem implementation. But I can speak about the implementation that I use. They have a total of 30Mb/s bandwidth dedicated to each hub, and a maximum of 500 houses per hub. If they achieve 25% sales of internet access, that's 125 houses sharing 30Mb/s of bandwidth. This is beyond the dreams of the cable company.

    I have been monitoring my cable company's connection for over 3 years now by doing a download provided by the cable company every 30 minutes. Between me and the cable company I have never seen any slowdown of bandwidth at any time of the day at all. Now, I have seen slowdowns when connecting to the Internet, but never over the cable infrastructure.

    DSL bandwidths, although theoretically lower, are dedicated in the same way as T1 bandwidths are - you well never share that lower bandwidth potential with your neighbor the porn freak, or his friend the MP3 fanatic.

    This is just plain false. EVERYONE on the internet shares bandwidth. That's how it's built. You may not share the bandwidth with that person between you and the CO, but beyond the CO it's shared bandwidth. The only interesting question is whether or not there's enough bandwidth available for those who are sharing it.

    I can prove, with data, that between my cable company and me, there's plenty of bandwidth. I can't prove, but it seems pretty obvious that the bandwidth that my cable company has purchased to get to the Internet is not enough. But switching to DSL does not necessarily fix that problem. In fact, it could make it worse.

    My point: don't buy the hype that the telco's are putting out about cable infrastructure. If you want a great review of the basic differences check out this salon review [salon.com]. It's very good. And it supports the conclusion that the cable infrastructure is, generally speaking, better and faster than the DSL infrastructure.
    --

  • Monopoly? (Score:5)

    by mjh ( 57755 ) <(moc.nalcnroh) (ta) (kram)> on Thursday July 05, 2001 @06:14AM (#106973) Homepage Journal
    I read a lot about the M$ trial. I read the findings of fact, the conclusions of law, and the decision on the appeal. Every page. One of the things that I learned is that in order for it to be a monopoly, a relevant market has to be defined. Also, in order to have a monopoly, there must be no easy way for a customer to switch from the monopolist's products or service.

    Isn't it reasonable to define the relavant market for AOL Time Warner's cable stuff, as the broadband market? If true, then why aren't all the DSL providers already competitors? I currently have a Time Warner cable modem in my house, but I qualify for and can easily switch to DSL.

    If this is true, is it really fair to say that AOLTW has a monopoly in broadband services?
    --
  • With cable modems, however, the medium is shared. The best (albeit a inadequate one) analogy is that every cable modem is a workstation on a old thinnet (10Base5) ethernet network, with IP information assigned via bootp.

    Actually, this is a better analogy than you think. Most early cable modem technologies were just that: ethernet implemented over 75ohm coaxial cable. Thinnet is ethernet implemented over 50ohm coax. There are a lot of changes now, though with DOCSIS, although the underlying infrastructure is still very similar to ethernet over 75ohm coax.

    it's far harder to differentiate one ISP from another.

    This is not entirely accurate. The cable companies are quite capable of providing layer 2 differentiation. The way that cable modems implement their signal is to allocate channels from the underlying infrastructure. Yes the same thing that normally a TV signal would ride over. So downstream data gets sent over one channel, and upstream over a different channel. Thus it takes 2 channels (plus a lot of underlying infrastructure to be able to send the reverse path cable signal) to implement a layer 2 data network in a cable infrastructure. Well, if you want another layer 2 data network, that is completely seperate from the first, you simply allocate 2 different channels for the up/downstream data flow, and give those channels to the new ISP. Poof! The first ISP's users don't see/know/interfere with the second ISP's users. It's as if they're using completely seperate physical networks. Ain't broadband grand?

    This is not just theory, it's practice. Where I live, prior to the cable company implementing DOCSIS, they used a proprietary system made by motorola. Well, in order to migrate to DOCSIS for new customers, and not disrupt old customers, they simply implemented a new layer 2 network on different channels for DOCSIS, and kept the old layer 2 network for the proprietary modems.

    If AOLTW is going to provide service for Earthlink, Juno, et al, they'll simply supply two additional channels for each of their "competitors" and let them take care of the rest of it.

    This of course puts a limiting factor on the number of different ISP's that can service the cable infrastructure. There is a limited number of channels available on the cable infrastructure, and by far most of them are taken up by standard TV channels, and digital TV channels.

    Hope this clears some things up.
    --

  • Re:Road Runner rocks. (Score:4)

    by kaniff ( 63108 ) on Thursday July 05, 2001 @06:32AM (#106975) Homepage
    10Mbps UP WITH @HOME?!

    Put down the crackpipe buddy and take a long step back. All @home providers cap uploads at 128Kbps, including comcast.. who, by the way, has one of the worst customer satisfaction ratings as far as broadband goes. But I digress. Roadrunner is also capped, I believe, but the majority of Time Warner cable modems cap at 384Kbps. I know, I have one. That 10Mbps number is just funny, no cable modem in existence even downloads at 10Mbps and the majority only reach 1.5Mbps download speed.

    so there. ;p
  • The general figure for the cable industry is about $750 per home passed for the installation of a two-way network. Assume (just for the sake of argument) that you could do something else, say CAT-5 and hardened Etherswitches, for half that: $375 per home passed. Assume that 33% of homes will subscribe (optimistic) and you spend $1125 per subscriber just for the outside plant. Assuming you want to get your money back in four years, and ignoring the time value of money, you need to charge... $23.44 per sub per month to pay for the distribution network.

    You also need to pay for ongoing operations: help desk and sales agents and billing systems and trucks and repair staff and spare parts and air-conditioned space for the people and electricity to run everything. And the network is not worth much unless it's connected to the Internet, so you'll have routers and T3s and all that good stuff.

    I work on this stuff and I'm always surprised that we ever make any money. Overbuilders, companies that want to be the "second" cable company in a city, are finding it very difficult to raise money for construction these days.

  • Quasi-interesting add-on expense item. See the Wall Street Journal article [wsj.com] which pegs the cable companies' cost for using utility poles at $5 to $7 per pole per year, and how those costs could go up significantly in the future.
  • Hmm... my cable modem is capped at 2.0MB/s download. DSL is available at 1.5MB/s download. I would agree with you, if the difference were what it used to be (prior to the cap). It used to be closer to 6-7MB/s download. Since the cap, though, the difference seems pretty small to me.

    This is kind of off topic, but if you are looking at Southwestern Bell, I believe their DSL goes up to 6MB/s...

    Mike.

  • What are you talking about? In every part of the United States I've been to, you have exactly ONE cable provider that services your home.

    This is changing. I actually have a choice between two different cable TV / cable internet companies. The fact is that they are pretty similar in terms of pricing, services offered and horrible customer service but I do have a choice.

    ________________________

  • The answer to this, of course, was open-source Linux. Now who is MS's biggest competitor? If you read *any* tech news, you know that it sure as hell isn't Apple or IBM.

    Are you sure about this? There are a lot of folks out there talking about Mac OS X, and how it's combination of an opensource (FreeBSD derived) belly and dPDF based interface are very impressive... Now let's imagine for a moment that the iMac2 (running IBM chips) arrives in three weeks and Apple throws a couple engineers at the OpenOffice project, a few more at DV apps (FC Pro, DVD Studio, DVD Player, etc. ), a few at audio apps, and what do you get... You get a pretty formidible challenger to MS..

    You don't honestly think that Linux is the answer to MS in the business world at this point do you? ..

  • Sorry, I can't say anything against AOL, since:
    + AOL 0wnz Netscape;
    + Netscape pays for Mozilla;
    + Mozilla is the coolest open-source project ever. IMHO

    all my base are belong to AOL/TimeWarner/Netscape/Mozilla/CNN.

  • Depends on the industry. The concept you're referring to is called economies of scale. It doesn't happen in all industries, and is more pronounced in some (like auto manufacturing) than others. In the case of ISPs and telcos, scale economies are exhausted at fairly low levels of production. What's more important is a concept economists call (appropriately) network effects. This basically means that a product (like telephone service) becomes more useful as more people use it. If each ISP/telco has to build their own lines, then (a) there will be incompatabilities between the system, (b) the product will be worth less to people, and (c) the cost of those lines will have been needlessly duplicated by each company. If, however, there are a common set of lines where all ISPs/telcos have equal access, then those costs are borne only once and ISPs/telcos can compete on price.

    Unfornately, there's the problem of who should build and own the lines and infrastructure. Logic dictates that it should be a third party not involved in the market, but too often politicians choose the biggest telco around, and try to force them to lease out that infrastructure at their long run cost. That was embodied in the 1996 Telecom Act here in the US, but it really hasn't worked. The big telcos that own the infrastructure can play games to limit their competition in the ISP space (limiting upload speeds to 128k, slower maintenance response, etc). Pac Bell is infamous for this, and as a result there are much fewer competing DSL providers in the western region.

  • That would actually make a pretty good Slashdot question:

    How do you make your Windows box so unstable?

    I have my issues with Windows, but my two Windows machines are only rebooted every two to three weeks whenever I do something really abusive, the power flickers or just feel like doing it for shits and grins, and god knows I beat the hell out of them by running a dozen different applications at once while installing and uninstalling apps left and right. It does damn near everything that I need an OS to do, and if the explorer shell allowed more customization rather than requiring a buggy substitute like LiteStep, the OS had scripting functionality on the order of the bash shell and support for real symbolic links rather than those shitty shortcuts, I'd probably migrate to borderline true believer. But then I have no time to spend on zealotry to my tools; I'm too damned busy using them. There are features of other OSes that I like (well, except MacOS; the year I spent as a typesetter working on Macs, or more accurately, clearing bomb icon windows and rebooting Macs, has caused me to vow to never use an Apple product again), but Windows just happens to have the greatest combination of features and software at this time for my needs.

    Deosyne
  • My RoadRunner (Tampa Bay, Florida) is capable of (according to them) 768Kbps up and ~4Mbps down. From my own experience both of those numbers are pretty close to the truth, though I must admit it seems slow after being spoiled by a university line for so long.
  • I live in Sheffield. I live within the supposedly allowed distance of the exchange and ADSL still won't work.

    BT told me my line was too noisy, then tried to get me to fork out for a higher quality line, with absolutely no guarantee that ADSL would work afterwards. It took them nearly six months to tell me that.

    Who's your cable modem provider?
  • > I'm from the DSL company in your neighbourhood and can firmly assure you that we wil do whatever
    > it takes to make sure that you NEVER get broadband. Come hell or high piss.

    Yeah, you work for BT customer care don't you? I think I spoke to you a couple of times on the phone.
  • Just checked this out - service not available in my area - I'm about 2 miles from the centre of town. Great.
  • and just be grateful that you live in a country where you can get broadband access at all.

    I live in the 5th or 6th (forget which) biggest city in britain, and I've been trying to get broadband, be it cable modem, DSL or whatever, for about a year. Still stuck with the 56k modem.

    I'd *love* to pay slightly over the odds for a cable modem.
  • If there was anything wrong with monopolies, we could actually use Brand X routers. But we can't. There is only Cisco.
  • I'm in mckinney and get 1mbit up/down cable for $49 a month.
  • Or, you could use something like freenet, such that something like 50k or so of a file was served from a single point. If youre downloading 50k from 1000 servers, it doesnt really matter if you can only up at 28k. Even at 10 Mb/s, maxing out your pipe, youre still only using 1.25k/s from each server.And reaqlly, when was the last time you maxed out your pipe? Given enoguh distributed computers, you can keep anything online, as long as you have any up capability whatsoever
  • You forget that most college kids are the ones providing the files to share, and most colleges turn a blind eye to such practices.
  • Sweden:

    Telia ComHem Cable: 0.5Mbit in, 128kbit out

    Telia ADSL: 0.5Mbit in, 0.4Mbit out

    Bonet ADSL: 2.5Mbit in, 0.75Mbit out

    ... those are the cable/ADSL ones. Then there's Bredbandsbolaget with ethernet 10Mbit in/out of course, but they're not available at that many places.

    So - here ADSL is better than cable.

  • crack dealers have not formed a giant conglomerate that's pretty much immune to legal action

    They have, its called the CIA [cia.gov].
  • "however they really haven't screwed over the consumers..."

    When I can't buy a good product at a good price because some asshole monopolist destroyed the good product / good price options and is leaving me with my only choice as a shitty product at a mediocre price ...

    ... well, as a consumer, I feel pretty screwed.
  • The names were blacked out. When you viewed it on a fast computer, the black block would black out the text so quickly that you couldn't tell that there was any text there. Some guy happened to open the doc on a really pokey machine and could see the black blocks being painted in over the names and realized that they really did not take out the names, they just put a block over them.


    kickin' science like no one else can,
    my dick is twice as long as my attention span.

  • Re:stop complaining! (Score:5)

    by Dr_Cheeks ( 110261 ) on Thursday July 05, 2001 @06:37AM (#106997) Homepage Journal
    Spare a thought for those of us in the sticks - I'm up in Yorkshire in a little town called Hebden Bridge - the nearest place that they're even thinking about putting out DSL is Halifax (8 miles away). We don't get cable either. And although I only live a couple of hundred yards from the nearest exchange, I don't expect to be able to get DSL for at least another 5 years unless someone gives OFTEL a bloody big stick then sends them round to BT HQ to physically beat some more lines out of them.

    Actually, with BT being so very very poor, we're in the faintly ridiculous position of AOL actually being on our side here in the UK (on this issue at least), seeing as they're the ones making the most noise about BT's low quality service and the alleged preference they've been showing to their minority ISP when it comes to DSL lines. I suggest any folk from elsewhere in the world go check out The Register [theregister.co.uk] and do a search for BT to see just what a hinderance they are to wide-scale broadband.

    Anyway, the rest of us can currently only hope to trail in the wake of AOL's attempts to get a better service to exploit^H^H^H^H^H^H^H deliver to it's users. But since BT is rapidly going down the pan, I guess it's going to be a tough fight.

  • If you were the only person in America that sold red widgets, then would you charge a lower price just because you were able to produce at really-high volume?

    Of course I would, wouldn't you?

  • Better to let AOL pick and give the government veto power. This way you don't sit in court for decades arguing over whether or not the 3 which were picked are fair to AOL. AOL picked them, now all that's left is for the governement to approve them, something which I feel they should do.
  • > No matter what three they pick, they're going to get slammed here on slashdot.

    Ok it's official: I've gotten tired of comments like the above where someone thinks there's something profound and revelatory about the notion that skepticism is a common practice amongst slashdot readers

    I'm sorry that is was my post that broke the camel's back, so to speak.

    It is well known that slashdot readers (at least the tiny subset that post) are generally skeptics. There's nothing prefound about that.

    My post was directed at Michael's skepticism, the slashdot editor, not any particular slashdot readers.

    I expect many slashdot readers to take skeptical and negative viewpoints, though there's often a good number of well reasoned posts, some skeptical, others optimistic. When I read user comments, I expect to see complaints that AOL chose some of its largest competitors for open access (aka whining). I even expect to see even more senseless reasoning, first posts, etc.

    But, I expect slashdot editors, who post to a news site with very wide readership, to adhere to the same sort of editorial standards as major newspapers and magazines regularily do. The big difference between slashdot and conventional print media is that when they print sub-standard editorials, I can feel like I got what I paid for!

    I suppose there also isn't anything profound about slashdot editors commonly being skeptical.

    I'm sorry it was my post that annoyed you so much.

  • What three would be OK then ?? (Score:4)

    by pjrc ( 134994 ) <paul@pjrc.com> on Thursday July 05, 2001 @06:13AM (#107001) Homepage Journal
    Yes, it's a bit questionable that they managed to negotiate for only three competitors, but accepting that that's finalized, what three competitors would be acceptable to you, oh slashdot editor?

    No matter what three they pick, they're going to get slammed here on slashdot. It's a no-win situation (for a postive or even neutral editorial on slashdot). The only way they could make a slashdot editor happy would be to decide, purely out of good-will to allow more than the required three competitors... and since they're a publically held company, they'd have one hell of a time explaining that to their shareholders (who would rightly sue if AOL doesn't do what's in the shareholder's best interests profit-wise, that is).

    Frankly, the fact that two of the largest ISPs are on the list is relatively good news. Had it been three tiny players without much presence, think of what this slashdot editorial would have said.... AOL picks non-starter competitors that they're just going to buy up as soon as the FTC isn't looking!

    Sure, the FTC could have required more than three, but they didn't and that fact is old news. If you don't like these three, then I ask, what three could have made you happier?

  • The more companies even if they are evil the better. I would rather have some form of competition. Microsoft has made a nice little blueprint for companies now emerging. AOL/Time Warner is one big ass company and if they control more than 50% of anything well I would not be happy. To much power in one hand is never good.
  • The reason they cap uploads, if anyone is wondering, is not because of a lack of bandwidth at the headend. Its because of the way you have to modulate the RF to spew fat data over a Cable Television live. For every byte you send up to the headend (from your house) thats FOUR bytes that could of gone downstream! Yes, it simply takes more FREQUENCY space on the cable line to send data up from the consumer. So, since most lusers just browse the web and download stupid pr0n, cap the uploads, and keep the downloads up there :)

  • I like road runner too when compared to an analog modem. When compared to comcast/@home, it's pathetic. Road runner caps my bandwidth at 1.5Mbps up, whereas I could get 10Mbps with @home. Also, road runner is not the most consistent service in the world. *shrug* Like I said, it's better than a 56k but nowhere near my old comcast speeds.
  • Get a fractional T1 since you ARE willing to pay more for your Hight speed bandwidth.

    T1s are _supposed_ to be more reliable and you are garuanteed your bandwidth.

    Problem solved.
    ---
  • Please tell me why slashdotters continually act surprised when they see that corporations act in their own self-interest...

    Isn't it a given that AOL will try to turn these terms to their advantage in _some_ way? Isn't that OK in a capitalist system? If so, stop your griping.

  • Re:Capitalism and Self Interest...? (Score:3)

    by torokun ( 148213 ) on Thursday July 05, 2001 @06:39AM (#107007) Homepage
    You should not expect corporations to be "fair". That's not how it works. Corporations should be expected to do whatever it takes to succeed within the constraints of the law. That's the motivation that drives our economy.

    It sounds like you want corporations to police themselves... This is not how our system is designed, and I'm glad. Why? Because it could never work, as this case illustrates.

    The government has the power to police these companies, and if it creates loopholes for them to exploit, we should expect the companies to take full advantage of those loopholes.

  • a redacted document in pdf? Hmmm... wonder if they did a better job than the CIA/NSA/FBI/whatever. Anyone recall the details of that one? I seem to remember it was a bunch of agent's names that were poorly hidden in a pdf document and someone discovered how to extract the info an put it up on the web or something, right?

    ---

  • The 10Mbps fellow is clearly living in an alternate reality, no question, but you should know better than to write "All @home providers cap uploads at 128Kbps". Comments like that always come back to bite you in the ass.

    I routinely get 400Kbps upload speeds with @home. Sorry. :-)
  • There's a fairly amusing article about hacking together a long-range (up to 14km) broadband connection using 802.11b at The Pulpit [pbs.org].

    It turns out that the trickiest part is not technical. It is buying the right telescope to let you see a house 10km away, then convincing the people in that house, whom you've discovered with your telescope, that you're not some crazy stalker, just a broadband-deprived net-addict willing to buy them dsl if they're willing to beam it to your house.

    Funny and clever. (Of course, I don't know about the geography in your neck of the woods. Do you have line-of-sight to that town 8km away?)
  • Wireless has much lower installation costs. The bandwidth is always increasing and hopefully these guys will be able to offer competitive services.

    I've often thought that municipalities should install and own the last mile and lease space in the cental office to everyone (Bells, cable, data, etc). Kinda like the city owns the road and all of your delivery services use it to get to you. This would put companies in their place because nobody would have an advantage. They would actually have to listen to the customers and deliver a service. But until politicians get a clue, we're stuck with the current system.

  • Careful with that FUD you're slinging around there... Sure Cable has a higher peak bandwidth potential but neither you nor anyone else will ever actualize that potential...

    Cable bandwidth is a shared resource, meaning that 10Mb/s is the most that can be flowing into or out of your neighborhood/apartment at one time. Furthermore, the bandwidth your modem can theoretically support is never the bandwidth your ISP will allocate to your area - typical individual cable connections are capped at around 500kb/s down and many are capped ridiculously low (in the order of 50kb/s) on the up side.

    DSL bandwidths, although theoretically lower, are dedicated in the same way as T1 bandwidths are - you well never share that lower bandwidth potential with your neighbor the porn freak, or his friend the MP3 fanatic.

    When you include all the facts, DSL does not come out 'inferior' to cable in price/performance at all.

    Ultimately the evaluation has to be extended to include customer service and technical know-how of the provider - and in this case, cable providers almost universally suck. Many DSL offerings are equally bad, but at least they don't come from the cable provider's "we'll fix you when we're good and ready" mindset.

    Besides... there are secret projects underway at the Bells to provide ubiquitous T1-type access over existing infrastructures, at relatively negligible costs (I can't substatiate this as I'm under NDA, so feel free to take it with a huge grain of salt) in the very near future.

  • Small Time Providers (Score:3)

    by Alien54 ( 180860 ) on Thursday July 05, 2001 @06:27AM (#107015) Journal
    Given the failures among the small time players, and some larger ones as well, I can seen AOL wanting to make sure that you do not have companies with a poor performance record providing the DSL for AOL.

    Maybe AOL can learn something?

    Check out the Vinny the Vampire [eplugz.com] comic strip

  • Local governments are in on it. (Score:5)

    by mc6809e ( 214243 ) on Thursday July 05, 2001 @06:45AM (#107028)
    That may sound a bit silly, but there is some truth to it. In over 95% of the places where cable is available, the local goverment has created, by law, a local monopoly through the franchise system. Basically, they authorize one and only one provider of cable service in a particular area. Im my case, its Time-Warner. Now why would a local government not allow others to come in and compete to offer service? Because they get a cut of the GROSS the cable company makes. Thats right, not the profit, but the gross. Again, in my case, its 5% right off the top. Its something like a mofia protection racket. The company pays 5% to the government, and the government insures that there won't be any pesky competition.
  • Personally I wish high speed internet was more expensive. Don't get me wrong, I'm glad that I don't have to pay too much, but the current low price seems to come with a low level of service. High speed internet is very important to me and I'd be willing to pay more if it meant better performance, uptime, and service. I think the low price is the reason why DSL and Cable Modems are penetrating the geography so slowly. Right now, I can't get high speed internet at any price where I live. That doesn't seem to make any sense. A block away, cable modems are ~$40. Where I am, I can't get DSL or Cable for $200+.
  • I dunno. Looks like some competition is shaping up. It's a shame that the point of the competition looks to be the determination of the greatest evil...

  • Open Source Broadband? (Score:4)

    by Bonker ( 243350 ) on Thursday July 05, 2001 @06:09AM (#107039)
    A lot of people have been raising the fact that it looks like we're heading for an 'ISP' Monopoly. We're at the point now with broadband service that we were with operating systems/platforms back in the early 80's. At the time, there were a few competitors such as DR. Dos, OS/2 (which many still cling to), Amiga, etc... for multimedia.

    Windows and MacOS came out on top, and the Apple software largely because MS has been trying to avoide *looking* like they're abusing their monopoly powers all along.

    The answer to this, of course, was open-source Linux. Now who is MS's biggest competitor? If you read *any* tech news, you know that it sure as hell isn't Apple or IBM.

    Here in not too long we're going to be in the same boat with broadband ISP's. We've got 2 or 3 nationwide carriers and a doublehandful os smaller competitors that don't really stand a chance if the big guys decide to play rough. In ten years, I have no doubt we will be facing life with Cable and DSL monopolies. How do we combat this?

    Can you say 'Wireless'?
    • The government has the power to police these companies, and if it creates loopholes for them to exploit, we should expect the companies to take full advantage of those loopholes.

    More, as shareholders, we should demand that they do everything that they can to maximise their profits.

    Which is kind of the problem. Trace share ownership, and most of it comes back (directly or indirectly) to a few super wealthy individuals, with a good deal of overlap with the group of elite CEO's who can command millions of dollars a year in salaries and bonuses.

    When government buddies up with business to create a dynamic, wealth generating economy, who are they generating wealth for?

    Consumers? The guys on the factory line?

    Uh, no. The few big shareholders.

    I'm not saying that's bad, just that capitalism only benefits you and me accidentally.

  • Here in QWEST territory (minnesota) in the old USWest days they made it real easy: Just buy a minimum T1 from them, and then handle the Internet side out.

    There is absolutely no reason why AOL/TW couldn't do the same -- provide private circuit transport to the ISP.

    The funny thing is, AOL used to be part of the OpenNet Coalition.... [opennetcoalition.com]

  • Now that is just plain silly. You being a /. reader, should very well know that you DO NOT HAVE TO USE any Microsoft or AOL products. Saying that you have no choice is rediculous. Yeah sure 25 million people use AOL and countless use Microsoft, but that doesn't mean they have to. I don't. I have never touched AOL besides AIM (which is free anyway and relatively stable, i'm sure they ripped it off someone else) and as for Microsoft I'm a linux user, except for the occasional Win2K box (which isn't a horrible product). As you said leaving me with my only choice as a shitty product at a mediocre price yeah thats pretty true... but its not the only choice. Linux is free. Other isps maybe alittle more than aol without the hassle or restrictions. Now of course you could be talking in the 3rd person, talking as if you were brand new to computers and only knew what old Gateway and its like give you. And if thats the case, then I'm sorry if you feel the need to stand up for those that choose to remain ignorant and exploited. As for me and a great many /. readers, if we don't like it... we don't use it. We do some research look around, find something else (Why not Windows...??? How does Linux, BSD, OS/2, etc sound), or hell we create our own. So my friend, there is a choice... its just a matter of taking it.

  • Haha... (Score:3)

    by powerlinekid ( 442532 ) on Thursday July 05, 2001 @05:50AM (#107060)
    As if anyone would be surprised by this. Aol and Microsoft (choose your evil) have been doing this since day 1, using a basic formula: Through cut throat tactics gain a rather good size market share, cut prices or hell give it away free raising market share again. Now merge with, finance, buyout or just plain destroy (Microsoft and Apple anyone???) your competitors and make a lot of money for along time. Money doesn't come from being the good guy folks, it comes from exploiting every possible expense or obstacle you have until it doesn't matter anymore. That is why companies like Microsoft and AOl have gotten so big... not because they're good software but because they've stood on the shoulders of others (IBM, Xerox, AT&T, etc) picking up scraps until all of a sudden they were the giants. Hate them as much as you want, but they do do one thing right: business. ps- i'm not saying they're right in what they do... however they really haven't screwed over the consumers... just other companies (which yes is very very bad, and I apologize to any programmer who had the bad luck of getting in the way of AOL or Microsoft and their goals).
  • Every time I watch that movie..and then read the news, "The Company" seems more and more like a reality.... shiver.
    --

  • Breakup (Score:3)

    by Violet Null ( 452694 ) on Thursday July 05, 2001 @06:14AM (#107067)
    It wasn't that long ago that AT&T, who had near total control of the phone lines, was forced to allow access to competitors. Methinks that if AOL/Time Warner doesn't watch their step, they might be in a similar situation a few years down the road.

    Not while Dubya's in the White House, but, still...

  • Sad... Depressing... (Score:4)

    by Saeger ( 456549 ) <farrellj@g m a il.com> on Thursday July 05, 2001 @05:41AM (#107081) Homepage
    The prospect of a real ISP monopoly scares me shitless, because I just know that they'll continue to take steps to limit free access to the point of only allowing white listed traffic over their lines.

    One day we'll see a ToS that says something like, "Port 80 IS the Internet; you get 10mbps down, 28.8kbps up; If we catch you tunneling your file-sharing app we reserve the right to rape you for the lost potential profits of our partners in crime."

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