Discussion

The Free Market Lie: Why Switzerland Has 25 Gbit Internet and America Doesn't

jeffrallen: [delayed]

ttul: In my small island community, I participated in a municipal committee whose mandate was to bring proper broadband to the island. Although two telecom duopolies already served the community, one of them had undersea fiber but zero fiber to the home (DSL remains the only option), whereas the other used a 670 Mbps wireless microwave link for backhaul and delivery via coaxial cable. And pricing? Insanely expensive for either terrible option.Our little committee investigated all manner of options, including bringing municipal fiber across alongside a new undersea electricity cable that the power company was installing anyway. I spoke to the manager of that project and he said there was no real barrier to adding a few strands of fiber, since the undersea high voltage line already had space for it (for the power company’s own signaling).Sadly, the municipality didn’t have any capital to invest a penny into that fiber, so one day, one of the municipal counselors just called up a friend who worked for a fiber laying company and asked them for a favor: put out a press release saying that they were “investigating” laying an undersea fiber to power a municipal fiber network on the little island.A few weeks later, the cable monopoly engaged a cable ship and began laying their own fiber. Competition works, folks. Even if you have to fake it.

bestouff: No it doesn't, and you just proved it. You managed it because you could fake you had leverage. But without that you were slaves of theses companies, and that's the general rule.

littlestymaar: This. Businesses aren't usually “competiting” in the way microeconomics think they do.Every business owner knows that a race to the bottom with other businesses in their market is going to ruin each other's life and they don't usually engage in this kind of practice (with the notable exception of people with lots of capital to wipe the competition out of the market then do a rug pull after the fact).

cjs_ac: Australia and the UK both have a similar business environment to the Swiss model (but without the superior bandwidth) due to the way that their government-owned telephone monopolies were privatised: Telecom Australia (now called Telstra) and British Telecom (now called BT) were required to allow their newly-formed competitors to sell services over their networks (for appropriate maintenance fees, of course).The US and German models are consequences of just yelling 'Free market!' without stopping to think about what's actually being sold in that market, and how to encourage genuine competition.

twelvedogs: Australia is still pretty messy, Telstra was privatised and pretty much stopped upgrading their network for years around the 24 mb ADSL levelEventually we had a forward thinking prime Minister create a new company that started running fibre to homes and wholesaling it to non government businesses but they lost power and fibre to the home became fibre to the neighbourhood running the last bit over existing phone linesEventually it was returned to fibre to the home as upgrading existing lines to run shitty 100mb connections was actually much more expensive than just running fibreWe're only now starting to get to the point where fibre is fairly available when it could have been ten years ago

dmix: In Canada our internet became much faster for cheaper with better customer support when the government allowed competition from smaller players. Telecom also got better when they allowed a foreign competitor to compete against the government mandated oligopoly. But the market is still heavily regulated in a way that benefits the existing monopolies.

sschueller: Yes, that is sadly still the case but the expansion of the fiber build out is now rapidly moving forward. By 2030 +90% will have fiberhttps://www.swisscom.ch/en/about/news/2024/02/08-weniger-kup...

hn_throwaway_99: As Peter Theil literally said, "Competition is for losers."

joe_the_user: Looks like a good article explaining some key concepts like natural monopoly.And yeah, the US model is to tout free enterprise to the skies but then have the state give control of a given market to a single or a couple of monopolists.The problem is the US has created a constituency of state-dependent small and large business people whose livelihood depends this contradictory free-enterprise ideology.

underlipton: The ultimate irony being that these people are the most likely to vote against social safety nets. "No free lunches" and such.

joe_the_user: It seems incorrect to call this competition.I'm glad you got your broadband but what happened sounds much more like American politics than ordinary market processes. And in this political environment, corporations can engage in a variety of other tactics than placating a squeaky wheel - they can outlaw competition, buy off officials, pay for shrill media hit pieces and so-forth.

HauntingPin: It's clearly competition. The incumbent company saw a potential competitor and acted upon it. That's literally what happens when there's competition. It doesn't matter that the competitor didn't actually exist if the incumbent behaved as if it did exist.I'm never sure what the point of comments like this is. "It seems incorrect". But it isn't. You just don't want to admit that competition is good and necessary.

poly2it: This article would be so much better without the generic AI-generated images everywhere.

sschueller: Agreed but I didn't want to just take random images from the web that I don't have the rights too and I my artistic skills are not good enough.

LoganDark: You could just not generate extra images that aren't relevant to the article. I like the charts and diagrams even when they're AI, because they serve a purpose. But the extra images for flair or whatever are completely pointless and even annoying.

sschueller: Ok thanks. I will keep that in mind for my next post.

heystefan: Please ignore them, the images definitely helped understand the issue better. Don't anchor on a couple of grouchy hn posters.

ma2kx: Init7 has on its blog another amazing write up https://blog.init7.net/en/die-glasfaserstreit-geschichte/

jauntywundrkind: Congress passed the Telecommunications Act of 1996 in the US which demanded network unbundling, splitting up the fiber/connections versus the internet service, demanding wholesale rate access to infrastructure. It was good.Then the courts decided, meh, we just don't like it. We are going to tell the FCC otherwise. It all went away. The incumbent local carriers have now had monopoly power over huge swarths of the infrastructure. No access to dark fiber. https://www.dwt.com/insights/2004/03/federal-court-eviscerat... https://en.wikipedia.org/wiki/United_States_Telecom_Associat...Verizon also sued, and said, sure, there's laws for unbundling. But, we really don't like them. We aren't going to deploy fiber if we have to share. And the court once again said, oh, yeah, well, that's fine, we'll grant that: we'll strike down congress's law because "innovation" sounds better. https://law.justia.com/cases/federal/appellate-courts/cadc/1...It's just so so so much corruption, so much meddling from the court to undo everything good congress worked so hard to make happen, that was such an essential baseline to allow competition. I remain very very angry about this all. This was such a sad decade of losing so much goodness, such competition. These damn cartels! The courts that keep giving them everything they want! Bah!!I think it was a other case,

frmersdog: And this is almost certainly the direct cause of the Dot Com Bubble bursting.https://www.youtube.com/watch?v=Wcv0600V5q4We were bamboozled on a massive scale.

andy99: What does one achieve with 25 GB internet? Are speeds actually usefully faster, or is there some other bottleneck that makes the practical speed the same as in the US?Also any workload I have that is bandwidth heavy would be on clouds machines between data centres and generally very fast. Are there reasons why someone at home would benefit from 25GB internet beyond whatever is available?Is this a case of over engineered central planning instead of a blow against the free market?

wat10000: I routinely max out my 1Gbps connection downloading large files for work. 25Gbps would cut my waiting substantially. I'm not sure how likely it is that the server would be able to fill that pipe, but if such connections were common, they'd probably make it happen.If people don't actually use the extra speed then it's effectively free to provide, anyway. If providers could advertise 25Gbps while only needing the same capacity they do for 1Gbps, I imagine they'd do it just to bring in a few more customers. The fact that they don't suggests it would result in more usage suggests it would be useful.

hparadiz: I can actually get 7 gbit but have no idea what I'd use with it. I'd need to upgrade my entire lan just to make use of it.

HauntingPin: Sometimes I wonder if whoever writes these comments understands the words their using.> No it doesn't, and you just proved itWhat exactly did they prove? You didn't substantiate or explain this at all. Leverage would be relevant if they were negotiating a deal. They weren't. The company laid down fibre because of what they saw as a potential competitor (municipal fibre). The municipality didn't use the threat of fibre to come to terms with the monopolistic company. That would've been leverage. But they didn't, so it wasn't leverage. The municipality created the appearance of competition and the monopoly behaved accordingly as if there were a potential competitor.

xboxnolifes: > ...one day, one of the municipal counselors just called up a friend who worked for a fiber laying company and asked them for a favor: put out a press release saying that they were “investigating” laying an undersea fiber to power a municipal fiber network on the little island.They called in a favor that put pressure on the company from public expectations.

HauntingPin: Yes. What do you think happens in a competitive marketplace? Sony heard about Nintendo partnering up with Philips for the SNES CD expansion, so Sony made their own console. That's literally competition.The details of how the "public pressure" came to be don't matter, because the monopoly didn't know about that. All they knew was there was a potential competitor, so they behaved according to that information. That's how it works.

chrismcb: Because it isn't a free market in the USA. And those that regulate it don't seem to care. Or maybe it is those that have been granted a monopoly do everything they can to retain said monopoly. Things would be different if we actually had a free market

schubidubiduba: Some markets just inherently turn non-free very quickly when left unsupervised. Especially infrastructure markets.

userbinator: All connections to the Internet are at some level "shared", except perhaps if you get a direct connection to one of the core routers. As others have mentioned, this is in a dense area and much closer to being in a LAN environment.The other point that I'd like to bring up is how useful is a 25G connection to your local demarcation point if your speeds to most sites will be far lower in practice because the Internet isn't circuit-switched.

Hikikomori: How many times has this argument been made?

mft_: I have a gentle rule, which is when discussing (geo)politics with friends, we're should try not to use Switzerland as an example. It's just too good, too rational, too sensible, too well run, in myriad ways that other countries should be able to emulate, but consistently and constantly don't.

dlcarrier: tl;dr: The lie here is the assumption that the US has, or has ever had, a free market for wired internet service providers.The article initially does a good job of describing the situation, but gets a bit confused when it gets to the history of the US, especially this line "This is what happens when you let natural monopolies operate without oversight." What it's discussing is not natural monopolies; it's discussing public utilities which are granted monopolies expressly through regulation, not despite it. Also, the US has a lot of oversite on wired ISPs. The prices are almost always approved by regulators.A good example of a natural monopoly is Google search. It's pretty common for people to get frustrated by it, and look for other search engines. There's also multiple companies trying to compete with it. Normally this would mean that users would migrate to the competitors, but Google's search algorithms have been so good that practically every user has stayed with Google.Natural monopolies are still easily disrupted, if the naturally-occurring barrier changes. For example, Internet Explorer had a natural monopoly, due to Microsoft's "embrace and extend" strategy giving it many capabilities that other web browser didn't have. When the internet market quickly migrated from a feature-first market to a security-first market, Internet explorer was quickly overtaken by Chrome and Firefox. There's a reasonable chance the same thing will happen with Google Search, as the market for it's search algorithm is overtaken for the marked for LLM based web searches, which Google is pretty bad at.Anyway, the reason Comcast or Charter is the only one that provides cable internet in your area isn't because it's too expensive for anyone else to deploy cables. At the margins they operate, it would be well worthwhile to invest in a parallel infrastructure, but it's downright prohibited almost everywhere in the US. In fact, they may own the rights to lay cable, despite having never laid any. This is the case where I live, for the phone company, which plays by similar rules.Fixed-wireless internet providers are starting to provide some competition, as backhauls have improve enough that cellular providers can compete with wired internet providers. T-Mobile is currently offering $20/mo fixed wireless add-on plans, with a five-year price guarantee. To complete with the fixed-wireless market, Comcast has launched a service called NOW Internet, which starts at $30/mo with a similar price guarantee and no no add-on requirement.Speaking of "starting at", a large source of high prices is the common use of FUD to pressure users into paying for more than they need, or can even use. Very few households peak at more than even 40 Mbps (https://www.wsj.com/graphics/faster-internet-not-worth-it/) and the starting price of almost every provider is above that, but must customers have been talked into higher-tier plans.The only web hosts that regularly provide data faster than that are video game distributors, so if you are in the type of household that would like to download game updates in minutes, instead of tens of minutes, while also watching multiple 4K video streams, then comparing other plans may be worthwhile, otherwise stick with the absolute cheapest plan available from all providers that serve your area. (And, if you are big on multi-player gaming, selecting the ISP with the lowest latency will be beneficial, but all plans from a given service will be the same latency.)

zimpenfish: > The only web hosts that regularly provide data faster than [40Mbps] are video game distributorsNo? I've been trying to download my MyMiniFactory library[0] and I'm currently getting 25MBps over 5 downloads. A single download will easily do 15MBps.[0] Which sucks, even at high speed - they have no API, no bulk download, and you're limited to 6 items at a time. I have to click through 1000+ items with easily 5000+ sub-items and individually download each one.

sschueller: I heard that argument when I got 28.8k modem back in the day when that was quite uncommon.

0xy: They stopped upgrading their network because government was publicly implying they'd do something nationally on broadband.Before then, they were rolling out fast internet. Telstra's cable network (aka. BigPond Ultimate at the time) could do 100Mbps fifteen years ago!Today, the Australian government continues to stomp on the neck of the free market. Numerous initiatives for faster and better privately operated fiber wholesale networks have been sunk by the government, including TPG and others.TPG wanted to roll out faster AND cheaper fiber in the inner city. Government said no thanks, we'll keep NBN with abysmal upload speeds to protect our investment.

FireBeyond: > Telstra's cable network (aka. BigPond Ultimate at the time) could do 100Mbps fifteen years ago!Mhmm, it was great. But at what cost, you had on most plans a 1GB monthly cap.And then when I went to an ISDN connection they wanted 9c per megabyte. To be fair, they would let you do things like join their squid proxy caching hierarchy, but bleh.

throwaway27448: It's also too tiny to be representative of most of humanity

Hikikomori: Local municipality power companies put fiber in the ground whenever they put power. The result is fiber almost everywhere at very low cost. Even along rail and major roads.

jasonwatkinspdx: I think you misunderstood the article, or perhaps didn't read it?So the way the system works is each house has 4 physical fibers into it, that go into a central office without being aggregated up. Inside the central office any ISP can offer any speed vs price option they want, because they just patch you in at layer 1.So of course, most people wouldn't necessarily need to get 26Gbit. But if you want to offer it as an ISP you can, and it's up to customers to decide if it's worth the price.One obvious use case would be folks that work with high resolution video. Uncompressed 8K is about 8TiB per hour of footage. Compressed raw like RED cinema et all are more like 1TiB per hour at the high quality settings.25Gbit vs 1Gbit for moving 1TiB is 5 minutes vs 2 hours.A quick google says the 25Gbit service from Init7 is $80 bucks a month.Sounds like an astoundingly good deal vs what's available in the US to me.

ceejayoz: I have a gentle rule, which is "if you can do it in one place, it is probably possible to do it in a second". The Swiss are not a separate species.

mft_: So one would think.And yet, living in Switzerland after the UK involved one after another discovery of how well-ordered and -run a country could be. And then moving to Germany was like stepping back even further behind my memories of the UK.I'm sure you could find examples of countries that do specific things as well as Switzerland; but I'm not aware of many places that do almost everything so excellently. (Maybe Japan, in many respects, but I lack sufficient direct experience to adequately judge.)

ceejayoz: I don't doubt there are differences.I doubt they're insurmountable. Again, because the Swiss aren't some genetically superior subspecies. Culture can be changed.I see Americans talk about how impossible universal healthcare is as if the rest of the developed world hasn't largely figured it out.

manquer: [delayed]

joe_the_user: OK, I should have said "economic competition" though I imagined that it was implied.If you just say "competition", you can point at the efforts of ten people to gain a seat on the politbureau as a clear case of this.

raw_anon_1111: This article is technically incorrect on so many levels I didn’t even bother to finish it.1. There may be a territorial monopoly on cable. But there is nothing stopping other companies from laying fiber. There are areas - including where I use to live that had cable and the phone company laying fiber2. All internet is using “shared” connection. The difference is whether it is shared at the last mile or upstream.3. Fiber is rarely shared at the last mile.4. Just a little research says 25Gbps is not universal across Switzerland5. When I did have AT&T Fiber that advertised at 1GB u/d, it didn’t slow down no matter what time of day.Please don’t suffer from the Gell-Mann Amnesia Effect. M

youainti: This is a perfect example of competition in microeconomics. If you've only been exposed to an introductory economics, you've missed out on a lot.This type of situation sounds like an amalgamation of a few exam questions from my first year of an econ PhD. "Cheap talk in a Bertrand market with entry costs and capacity constraints" or something. No I haven't worked it out but my intuition is that it would predict exactly what was observed: the threat of a new entrant with enough capacity risks loosing your entire business so you invest to expand your capacity to prevent that entry.

simoncion: Most markets inherently turn non-free when left unsupervised. That's the insight that folks like Keynes (and of any honest, informed observer with two functioning brain cells). That's why anti-trust and competition-preserving regulators and laws are essential. Without them, a very few powerful players form [0] cartels and/or tri/du/monopolies and enrich themselves vastly out of proportion with the value that they provide to their customers.[0] ...often legally protected...

sowbug: Enough to make https://en.wikipedia.org/wiki/Jevons_paradox into a thing.

postsantum: No, it's called market manipulation. OP's action caused spending at the expense of the companies. Not going to "won't someone think of the shareholders", but calling competition is misleading

intalentive: There won’t be anti-trust as long as elections can be bought and there’s a revolving door between regulators and industry. We need a firewall to separate capital and state.

ceejayoz: Switzerland has a population larger than all but ~11 US states.

raw_anon_1111: It’s not a good article at all…https://news.ycombinator.com/item?id=47654841

yawnxyz: Australia has the absolute worst internet

simoncion: > I'd need to upgrade my entire lan just to make use of it.If the concern is cost (rather than recabling the house) Mikrotik sells solid, inexpensive gear. Its management UIs take a bit of getting used to, but are fine once you've figured them out. You can also find two-port Intel 10gbit NICs on the Newegg "Marketplace" for ~40USD [0], and -while most already come with modules (and you will be informed if they don't)- if the X520s you're sold don't permit non-Intel transcievers, the NIC's firmware can usually be easily modified to change that. [1][0] <https:&#x2F;&#x2F;www.newegg.com&#x2F;intel-e10g42bfsr&#x2F;p&#x2F;N82E16833106041>[1] <https:&#x2F;&#x2F;forums.servethehome.com&#x2F;index.php?threads%2Fpatching...>

raw_anon_1111: And even at 1Gbps when I had it, the game servers couldn’t keep up.

raw_anon_1111: And a slightly more detailed Google search says it isn’t a sold or universally.

raw_anon_1111: Well and a little bit of research, tells me it’s far from universal across Switzerland. This article is so provable false in many of its premises it’s worthless - see my other comment.