> and there seems to be very limited innovation in the last mile - even in London it's hard to get more than 20mbps, and many people in rural areas are stuck with a crappy DSL line at 2mbps or so.
This is the entirety of the problem with the DSL-style line sharing. If the companies operating the infrastructure get paid on a per-customer basis, they have no incentive to make the service better by improving service for individual customers. The incentive is to provide service to as many customers as possible regardless of the quality / speed of that service.
If you want DSL-style line sharing to work in the US, the line owners will need to charge the ISPs on a per-gigabyte basis. This pretty much requires the ISPs to charge on a metered basis as well. This would be an overwhelmingly bad thing for companies doing business over the Internet.
I've been banging this drum for a while: companies will act in their own best interest, so you have to align the economic incentives with the desired behavior. If you try to regulate to enforce the behavior you want without the proper incentives, the investment dollars will just move somewhere else because it becomes too hard to make a profit.
> If you want DSL-style line sharing to work in the US, the line owners will need to charge the ISPs on a per-gigabyte basis. This pretty much requires the ISPs to charge on a metered basis as well. This would be an overwhelmingly bad thing for companies doing business over the Internet.
Why? It seems to me that metered internet could work just fine, if the prices are at least somewhat connected with reality (meaning cents per gigabyte at most, with a base cost not more than about $20/month). The form of metering we currently have in the US is usually punitive overage charges for data in excess of some unrealistically low monthly quota, and is applied on top of $60+/month subscription fees. That's obviously bad for internet content providers (since their whole point is to deter further usage), but I think reasonable prices are possible.
But the prices you list aren't connected with reality. They're your wishful thinking of what Internet access should cost. Reality says that most telecom companies make about 10-15% net margins, so there really isn't room to drop prices more than 10% or so from where they are currently, even if the ISPs are willing to abandon all hope of profits.
It's also a well-known psychological phenomenon that people will curtail usage if they know their usage will cost them more -- even if the amount is trivial. The last thing Internet-based companies like Netflix or Amazon want is for people to use the Internet less. Current metering systems really only "catch" the most egregious offenders (less than 1% of total customers). Most ISPs have a "business class" plan you can purchase for more that truly is unlimited, if you find yourself exceeding the caps on a residential account on a regular basis.
Telecoms have huge marketing budgets. A large portion is just a zero-sum war with competitors (another portion is enticing people to upgrade existing service).
Those are effectively a source of hidden profit margins--NFL, Major League Baseball, et. al. get them instead of the telecom operators, but when looking at how much prices could drop, you have to consider that.
Telecom service is by its very nature a high-churn business: you lose approximately 20% of your customers every year. Churn happens for a lot of reasons: people move, competitors offer better deals, or people simply get rid of the service (but the "people move" one is actually probably the biggest). But because it's a high-churn business, you have to do brand marketing so that when people say "I need TV service. Who offers that?" your name is the first one they think of. Since so many of your customers leave you (and your competitors) every year, you have to be constantly acquiring new customers through a variety of means. If you don't, you'll be out of business in 5 years flat.
The huge marketing budgets don't go away if you suddenly split the market between a dozen or so providers. In fact, overall marketing spend across the industry would probably go up substantially because there would be more competition for limited consumer mindshare.
Total bullshit. People don't replace the wires in their yard every 5 years. Sure, they move (and immediately get replaced by new customers), and they sometimes opt out of the TV service and increasingly opt out of landline phone service, but the only "churn" that's relevant to this discussion is people switching between DSL and Cable, which wouldn't matter if we could get one set of neutral cables installed to get the data to and from the nearest peering points. The rest of the churn you listed and its overhead costs are for the parts of the business that need to be divorced from the actual internet connectivity.
If you have multiple ISPs selling connectivity over a carrier-neutral set of wires, they're going to be trying to poach each others' customers whenever they churn. Any business with high customer churn carries high marketing costs because the return on marketing is relatively good with 20% of the market up for grabs every year. With more players doing marketing in a zero-sum system, overall marketing spend is likely to rise, not decline.
All I'm saying is that the marketing costs wouldn't go away even if the big cable companies do: they would just be replaced by a dozen smaller companies doing the marketing, billing and connectivity. These smaller ISPs would just be taking each others' customers rather than customers jumping ship to DSL or some other last-mile tech.
This is the entirety of the problem with the DSL-style line sharing. If the companies operating the infrastructure get paid on a per-customer basis, they have no incentive to make the service better by improving service for individual customers. The incentive is to provide service to as many customers as possible regardless of the quality / speed of that service.
If you want DSL-style line sharing to work in the US, the line owners will need to charge the ISPs on a per-gigabyte basis. This pretty much requires the ISPs to charge on a metered basis as well. This would be an overwhelmingly bad thing for companies doing business over the Internet.
I've been banging this drum for a while: companies will act in their own best interest, so you have to align the economic incentives with the desired behavior. If you try to regulate to enforce the behavior you want without the proper incentives, the investment dollars will just move somewhere else because it becomes too hard to make a profit.