Why your phone, cable and internet costs so much.......

[SoonerDave]

At the risk of a thread hijack...some people translate what has been referred to as "inefficiency" into "freedom." As in the freedom to live where we wish. That freedom doesn't always guarantee everyone gets high-speed Internet or 500-channel all-digital cable television on demand.

[CaptDave]

At the risk of a thread hijack...some people translate what has been referred to as "inefficiency" into "freedom." As in the freedom to live where we wish. That freedom doesn't always guarantee everyone gets high-speed Internet or 500-channel all-digital cable television on demand.

I understand that - but these same people do not want to bear the cost of that freedom. They should be responsible for their own infrastructure if they want to live miles away from other people, yet they demand the usually "evil" government provide them with water, sewer, trash collection, roads, police and fire services, etc.

If we permitted companies such as the telecom industry to maximize their service AND return on investment by focusing on areas with more population density, our level of service in specific areas would quickly rise to state of the art levels. Yet we demand they cover everyone over huge distances and that inevitably dilutes the level of service they can provide. Those that choose to live outside that service area should have to make do with whatever is available because it is their choice to reside outside the "better" area.

[Dubya61]

I understand that - but these same people do not want to bear the cost of that freedom. They should be responsible for their own infrastructure if they want to live miles away from other people, yet they demand the usually "evil" government provide them with water, sewer, trash collection, roads, police and fire services, etc.

If we permitted companies such as the telecom industry to maximize their service AND return on investment by focusing on areas with more population density, our level of service in specific areas would quickly rise to state of the art levels. Yet we demand they cover everyone over huge distances and that inevitably dilutes the level of service they can provide. Those that choose to live outside that service area should have to make do with whatever is available because it is their choice to reside outside the "better" area.

Let me provide the opposing point of view. I am one of those supposed drains on your quality of services, but certainly NOT by choice. When my family moved back here, we purposely chose a rural setting and (mistakenly) trusted our real estate agent to ensure that. Lo and behold, we are in OKC city limits and are dismayed by that. Do I have the option to avail myself of those superior services that you find so diluted because of me? No. I am limited to McLoud TelCo for land-line (don't use one anymore) and satellite television services. I wish for two things to happen here magically (but don't expect either to happen): 1) OKC to contract and put me back outside of city limits and 2) let any company that chooses to provide services to my land do so. I would happily pay a fair market rate for high-speed internet services at my residence and would understand if AT&T, Cox or any provider would charge more, but that is not an option. Both AT&T and Cox tell me they are not permitted to provide me ANY service. I wish the free market would rule in my favor on that one.

[CaptDave]

Hmmm - very interesting Dubya. I am the first to admit I am part of this issue also. For years I aspired to my own little bubble in suburbia and over the last few years have been seriously reconsidering that aspiration. I think you have seen some of my thoughts on the topic and those thoughts stem from my own awakening to the costs (and benefits) of that choice.

Honestly, I would like to see our cities revert to historical patterns of development and density. I think the advantages greatly outweigh any negatives. If that were to happen, I believe those that choose to live in the urban areas (including towns, not just large cities) would enjoy this higher level of service at a reasonable cost. Simultaneously, those that choose to live in an area such as you describe would be able to purchase comparable service to that available now, possibly at reduced cost or at least basically the same as present rates.

Unfortunately we have these rings of development around our urban areas that only serve to push the rural areas even farther away from the infrastructure required to provide that service. As we create more of these rings of cyclical development, we continually leave the middle rings to fall into disrepair - I think rather than exclusively developing greenfields, we should provide incentives for developers to revitalize these middle rings rather than extending infrastructure into even more unsustainable lengths.

[Just the facts]

Let me add this to what CaptDave said. Take the post office as an example. They are going broke trying to provide service 6 days a week to every address in America. How about if they provided 6 day service to every house within 3 miles of a post office, 4 days a week service (with a more expensive stamp) for homes 3 to 5 miles from the post office, and 1X a week service and a $2 first class stamp for homes 5 to 10 miles from the post office. Finally, no mail delivery for anyone more than 10 miles from the post office. If you want to live that far away you have to go to the post office yourself for your mail.

[Just the facts]

Do I have the option to avail myself of those superior services that you find so diluted because of me? No. I am limited to McLoud TelCo for land-line (don't use one anymore) and satellite television services.

It sounds like you live far enough way to actually pay some of the cost of living rural - part of that cost being that some services are not available at any price. Meanwhile, far flung rural subdivisions do have access to the very services you yourself are deprived of. Do you ever wonder how McLoud TelCo can afford to deliver phone service to your house but ATT can't? The answer, the state and federal governments pay them to do it and sticks the rest of us with the bill. If you truly had to pay the cost of providing phone service to you, you probably couldn't afford it.

Satellite TV is a different story since distance isn't an issue. Your DirecTV bill is probably the same as mine.

Too much good stuff to quote but here is a story about Verizon wanting to abandond rural customers - that they are required by law to provide service to at below actual cost.
http://stopthecap.com/2012/07/17/ver...eless-profits/

[Dubya61]

JTF / CaptDave: I believe y'all are right. For the record, I am happy to read all of your posts and generally agree with them. I only responded to forestall somebody breaking out the pitchforks and coming to redraw the city limits boundaries in my blood (hyperbole? yeah. overdramatic? yeah? kinda funny? I think so.).
I saw a news article somewhere (I can't remember where or how recent) that the city was actually having some debate over what services to provide to their "rural" areas. The author alluded to the recent expansion of the city limits being an attempt to actually CONTROL sprawl. I think they thought they could control it if OKC claimed and controlled the area. Of course the article also alluded to the ideas that the debate was happening because developers wanted to sprawl (is that a verb?) and the elected officials didn't really want to, but darn it, the developers sure were funding their (re-)election campaigns. What's an elected stooge to do? I don't know if that's the right way to control sprawl. I think the only way to control sprawl is to scale the services and the fees. You wanna live here? It'll cost you this much. You wanna live way out there? It'll cost you this much (more). I don't think we're on opposite sides of any of that. I think we all want OKC to be the best home for us all and that excellence has to come at a cost to those who are driving the prices up -- or not. I'd gladly be one of those who does not drive the prices up. Redraw the city limts (but with ink, not blood).

[Dubya61]

It sounds like you live far enough way to actually pay the cost of living rural - part of that cost being that some services are not available at any price. Meanwhile, far flung rural subdivisions do have access to the very services you yourself are deprived of. Do you ever wonder how McLoud TelCo can afford to deliver phone service to your house but ATT can't? The answer, the state and federal governments pay them to do it and sticks the rest of us with the bill. If you truly had to pay the cost of providing phone service to you, you probably couldn't afford it.

Satellite TV is a different story since distance isn't an issue. Your DirecTV bill is probably the same as mine.

Too much good stuff to quote but here is a story about Verizon wanting to abandond rural customers - that they are required by law to provide service to at below actual cost.
Verizon CEO Ponders Killing Off Rural Phone/Broadband Service & Rake In Wireless Profits | Stop the Cap!

To be sure, we're doing just fine without the landline and I can use satellite to get internet, too. Just haven't taken that step yet.

[Just the facts]

To be sure, we're doing just fine without the landline and I can use satellite to get internet, too. Just haven't taken that step yet.

My sister lives in rural OKC as well and she used DirectWay for several years. She said she didn't like it and recently switched to one of the little 5-users devices from Sprint. Even here in Jax, it is surprising how fast quality internet serivce drops off from the urban core. I live inside the beltway and we have 3 options for internet 1) Cable (over $100 per month), ATT DSL (too slow to watch Netflix), and Clear (I'm happy with but the wife hates). We have friends that live in remote subdivisions and all they can get are dial-up. They just assumed they live in a new subdivision so they should have access to multiple providers and fast service. It isn't until after they move that they realize they don't.

[NoOkie]

To be sure, we're doing just fine without the landline and I can use satellite to get internet, too. Just haven't taken that step yet.

Don't, it's worthless. If your cellular data speeds are good, look into a mifi/hotspot type setup. Otherwise, look into one of the local long range Wifi providers like @link. There's another one, but I can't remember their name.

Anyway, to un-derail. I totally understand your point JTF that sprawl can contribute to costs of telecom services. My point is merely that it is only part of the equation and things don't add up in the price we're paying for services rendered. A much bigger part of the problem is the monopolistic or duopolistic nature of their coverage. I just had lunch with a colleague of mine and we were discussing his bandwidth problems at a satellite office. What it boiled down to was that there was only one provider in that area and they had no incentive to provide better service. The free market can work, but only when it hasn't been rigged. Telecom is a rigged market.

[Just the facts]

I am sure telecoms look at how many customers there are to serve, the cost to serve them, how much those customers are willing to pay, and the elastity of the demand for their product. Providing internet service to 100 people living in the same building (Level) is much cheaper than providing that same service to 100 people spread across 1 sq mile (rural OKC). The problem is that the provider charges both groups the same price. This is the point Verizon was trying to make. They could drop the rural customers, lower the price for their urban customers, still make more money, and focus profits on improving the speed for their urban customers. So what is the problem with that plan? The government doesn't allow that. Keep in mind that this is the same government that made low density sprawl possible in the first place and subsidze it today with massive deficit spending.

[bchris02]

1. It would be nearly impossible to cover much of the US with super-high speed broadband. Many are lucky to even be able to get 1.5Mbps DSL. In China, urban areas are modernized but rural areas are mostly still stick in the 19th century, no electricity and all. I say quality of life in America's rural areas is much better than many other countries, even if some conveniences such as super-high speed Internet are lacking.

2. Most Americans simply don't need 1Gbps connections so thats why there really isn't any incentive for it. If it was offered, it would be expensive to implement and likely much more expensive for the customer than 3Mbps DSL at $14.99. It simply wouldn't sell except for businesses and tech enthusiasts and possibly gamers.

[zookeeper]

1. It would be nearly impossible to cover much of the US with super-high speed broadband. Many are lucky to even be able to get 1.5Mbps DSL. In China, urban areas are modernized but rural areas are mostly still stick in the 19th century, no electricity and all. I say quality of life in America's rural areas is much better than many other countries, even if some conveniences such as super-high speed Internet are lacking.

2. Most Americans simply don't need 1Gbps connections so thats why there really isn't any incentive for it. If it was offered, it would be expensive to implement and likely much more expensive for the customer than 3Mbps DSL at $14.99. It simply wouldn't sell except for businesses and tech enthusiasts and possibly gamers.

Re China, that's not my experience. Internet connections seemed to be like electric plugs are here. I just looked it up and approximately 80% of rural China has broadband and according to this they hope to improve that to 95% in 4 years. The U.S. continues to fall behind in so many areas.

[BoulderSooner]

Let me add this to what CaptDave said. Take the post office as an example. They are going broke trying to provide service 6 days a week to every address in America. How about if they provided 6 day service to every house within 3 miles of a post office, 4 days a week service (with a more expensive stamp) for homes 3 to 5 miles from the post office, and 1X a week service and a $2 first class stamp for homes 5 to 10 miles from the post office. Finally, no mail delivery for anyone more than 10 miles from the post office. If you want to live that far away you have to go to the post office yourself for your mail.

that would be fine .. if you designed it that way from the START .....

you can't change the rules in the middle of the game ...

USPS should go to 5 day delivery .... and/or be able to charge market rates for postage ..

[NoOkie]

2. Most Americans simply don't need 1Gbps connections so thats why there really isn't any incentive for it. If it was offered, it would be expensive to implement and likely much more expensive for the customer than 3Mbps DSL at $14.99. It simply wouldn't sell except for businesses and tech enthusiasts and possibly gamers.

While 1Gbps is overkill right now(For most, anyway), the inexorable march of tech will keep pushing the needed bandwidth. Remember when a fast cable modem was 512kbps? Also, streaming video is just going to keep growing and digital distribution is already a big thing. I imagine that the ultimate solution will be some sort of wireless as running that much fiber/cable can get expensive with the distances involved.

[stick47]

An old complaint I know, but how much could we save if we were allowed ala carte TV channel and phone features selection? Congress got bought off at our expense I"m sure.

[bluedogok]

Probably not as much as you think, ala carte pricing being cheaper is a fallacy. The only way that it would be possible is tired rates depending upon network and the channels most people would want to watch would command the highest rates. You could bet that you would end up paying the same or more for less, they would make sure of it.

[Just the facts]

Here is one reason the phone bill is what is. You can read the whole story if you want.

Carlos Slim, world

Griffin recently introduced a bill on Capitol Hill to end the Lifeline program, which cost $1.6 billion in 2011, up from $772 million in 2008. While not technically a tax, the program is funded by mandatory fees tacked on to consumers' phone bills, then disbursed through the Federal Communications Commission and states.



Read more: Carlos Slim, world

I think we all remember the Cleveland woman talking about her free phone. This is where that 'free' phone came from.