Net Neutrality

Is $10 a month for Netflix too little?

Some people are making a bunch of noise about Net Neutrality and how the FCC is in the pocket of the big internet companies. Then I came across a post about how what the FCC is doing is rolling back some regulations made over the last few years that have essentially restricted internet freedom. The arguments are a little complicated and given the amount of heat and noise, very partisan. Given that atmosphere, I'm not inclined to believe anything anyone is saying on the subject.

But it got me to thinking, and that led to trying to sort out the economics of the internet. Cable, whether coax or fiber-optic, seems to have an almost unlimited bandwidth. In a city with a million people and a thousand channels of broadcast it is almost certain that every one of those channels is being watched by somebody.

Installing the cables is a big expense. Stringing wires from poles and running lines into houses might only cost a couple of hundred bucks per house. Running fiber underground probably runs closer to $1,000, but you don't have the annual tree trimming expense or weather or other above ground mishaps to worry about. If you are looking at a 50 year timeline, you can see how the underground route could appeal to the capitalist investor.

But that's only part of the deal. You still need the equipment to pump your data into those cables and that means some kind of modem for every freaking channel. And then there are repeaters and boosters and who knows what all kinds of fancy commercial electronical gizmos are needed. I can see where a central distribution / collection point for a citywide network could easily cost $100,000. I guess in the overall scheme of things that's a pittance. If it costs on average $500 to hook up a residential customer, and 10% of the population in a city of a million people is connected, it will have cost $50 million to get them all connected. A hundred grand for a central hub is peanuts in comparison.

And then there are the shows that are broadcast, and their production costs. And advertising. And subscriber fees. The amount of money being thrown around is stupefying and it changes drastically every microsecond. Good luck trying to sort that out.

We're spending $175 a month for TV and hi-speed internet. We follow a couple of sports teams and that is basically all the TV we watch, unless you count the times we occasionally veg out in front of the tube. Now it might be possible to get those specific teams over the internet and save some money, but sorting that out is a colossal pain. Yes, you can get some of them here, and you can get some of them there, but finding someone who can give you everything you want is almost impossible. Well, not impossible, it just takes more than five minutes. which is all the time I am willing to spend on it. I have a low tolerance for useless information. Cable TV (Frontier Fiber-optic) gets us everything we want. It's expensive, but it works, and I don't have to read any legal boilerplate.

I suspect cable TV, like most big American businesses, is all about making money hand-over-fist. If someone in this business isn't making money fast enough, they might very well be tempted to go into illegal drug trafficking, another great American money machine.