Man who built ISP instead of paying Comcast $50K expands to hundreds of homes

The costs for internet in the US still surprises me, how on earth can it be so expensive?! I understand some countries, but in the US, it seems high costs are because "because we can", not because it has to be like that.

In comparison, you get 1 Gbps symmetric fiber connection in most countries in Europe for under ~$30/month. In some, you even get it for under $10/month (like Romania, which has surprisingly awesome internet infrastructure).

On the more measurable side I would imagine the cost of lines correlates with population density. Running wires to 100 single family homes is way more expensive than running the wires to a district of apartment buildings

In Canada they refuse to capacity because some "cities are too dense"

This is what happens when your government regulatory agencies gets captured [1] by corporate interests.

[1] https://en.wikipedia.org/wiki/Regulatory_capture

As much as I hate the high price where I live (Canada) I assume that Internet and wireless phone service is expensive because the country is so large that the build out cost is expensive. The USA is running 3/4 in the list of largest countries by land area and Canada is 2nd[1]. Maybe I'm naive in my thinking but I have family in a teeny tiny European country and they all have 1Gb fibre optic service for cheap-cheap.

[1] https://en.wikipedia.org/wiki/List_of_countries_and_dependen...

Comcast has 189,000 employees who make US salaries. It costs a lot less to dig a trench in Romania than in Seattle.

You can look at the profit margins. 11.3% for Comcast as of June 2022. That tells me they aren't simply collecting the difference between US and Romanian internet prices in profit.

Of course, far be it from me to defend Comcast, but this is basically just the concept of purchasing power parity (PPP)

Are those margins only on their broadband business? Comcast has other ventures as well.

Costs of deployment and profit margins have nothing to do with it. The US public has subsidized the cost of broadband internet deployment since the very birth of the internet, and continues to do so like clockwork every few years. Private ISPs continue to caress the books to make it seem like they're barely operating at a profit and still need more, without ever having delivered on the last promise. Taxpayers have paid for fiber to every home a few times over at this point.

http://irregulators.org/bookofbrokenpromises/

>The costs for internet in the US still surprises me, how on earth can it be so expensive?!

Monopolies and regulatory capture. I can't get ANY wired ISP where I'm at. Even AT&T ADSL which was like .5Mbps and ~50% packet loss terminated service to our neighborhood, saying the copper is too degraded. Comcast, for some reason, told us that to wire the entire neighborhood would cost them $73000 dollars, but they won't do it. That was 3 years ago. I'd have paid them 4000 dollars since then for business gigabit by now. I have been kicked off of multiple MVNO's (not for my abuse, but because AT&T/Verizon terminated their ability to sell SIMs for modem use).

My only current option is T-Mobile's home internet service (via LTE/5g), which works well most of the time but has some pretty ridiculous outages at least once a week. I gave Elon my 100 bucks years ago when they said we'd have starlink available by EOY 2021. They're now saying Q3 2023.

These ISP's have us over a barrel in the states.

I'm gonna bet the Romanian ISP has fewer employees per subscriber and fewer employees per mile of fiber.

Businesses without competition get fat.

Depends on how old the apartment buildings are. If the apartment buildings themselves are already wired with fiber (or really good, recent coax) it might be a lot cheaper running a single bundle of wires to services the building. (Keep in mind that ideally you still have one fiber wire per apartment to sell the highest speeds to each apartment, so you aren't necessarily saving on number of cables for 100 apartments versus 100 detached single-family homes.)

Of course, the older the buildings are the more expensive it gets. Running a new line into a single family home is usually a single new hole from the local utility trench or utility pole, which often have existing rights of way and known contact points to do utility work. Running new lines in an apartment complex often requires opening walls and ceilings between, among, and inside units, which then consequentially means doing new drywall and repainting (and maybe high costs to color match historic paints). If the apartments are condos there's even more complex rights of way issues in needing to get the consent of individual unit owners for some of the work.

The thing I can't really understand if this is the argument is where the money is actually going? With an on paper 11% profit margin it's certainly isn't shareholders, and even if the executives rake it would still be a blip in their total revenue.

To be honest, I only have second-hand experience with running Internet lines in a bunch of Soviet-era apartment blocks. On a lot of building designs there's typically a drop going through all floors that exposes the electricity meters in a common area of the stairwell. The cable would go in either through the underground utility way - most likely electricity or heat lines (central heating FTW) or by air from a neighboring house. There would be a switch in the attic where the connections from apartments would terminate.

>because the country is so large that the build out cost is expensive

Nah, that's just their excuse; most of the country's population lives in urban areas and they don't even bother running fiber or setting up cell towers in more rural areas aside from maybe along the main highways.

Remember, SaskTel (and MTS, before the government sold it to Bell) doesn't have a problem with charging reasonable rates or building out fiber (and turning a profit at the same time) and those are the lowest-density parts of the country. So no, the telcos aren't telling the truth.

> you get 1 Gbps symmetric fiber connection in most countries in Europe for under ~$30/month.

I suspect that decisionmakers in the US think that symmetric connections encourage communism.

Good question. I briefly looked into it and it seems they do break out the numbers for cable communications division (as well as media and entertainment) but I couldn't find a profit margin figure without opening the whole 10K and my calculator. Worth noting that the great majority of their business is cable communications.

However, Charter Communications is a competitor that is more of a pure play and their margin is 10.8%

I pay ~55$ a month for gigabit in the US. It’s that there are so many different states with different regulations that means we have both extremes generally.

Internet in Seattle is cheap, so that’s not a good example.

For comparison an hour of car mechanics time is <$30 in Romania, but ~$150 in US.

It is precisely shareholders and executives. 11% profit margin but huge share buybacks, bonuses and acquisitions.

Share buybacks and acquisitions come from post profit money, not pre profit, so they won't impact the margin. They're not a line item in operating expenses.

Bonuses and other remuneration will, but no executives are getting $5 billion annual bonuses there and ~$million bonuses won't move the needle.