Re: Observations of an Internet Middleman (Level3) (was: RIP Network Neutrality (was: Wow its been quiet here...

[Owen DeLong <owen () delong com>]

On May 16, 2014, at 3:25 AM, Rick Astley <jnanog () gmail com> wrote:

> > Broadband is too expensive in the US compared to other places
>
> I have seen this repeated so many times that I assume it's true but I have
> never seen anything objective as to why. I can tell you if you look at
> population density by country the US is 182nd in the world and the average
> broadband speed (based on OOKLA:
> http://www.netindex.com/download/allcountries/) is 30th in the world. South
> Korea that is well known for its fast broadband speeds has a density of
> 505/km vs the US at 32/km. We have about 1/15 of the population density and
> about 1/2 the average broadband speed. Hong Kong, Singapore, Netherlands,
> Japan, Macau etc. all have more than 10x the population density in the US
> so definitely not all countries with fast broadband make for a fair
> comparison and there are likely fewer that do. The UK is only beating the
> US by 2Mbps but has a population density of 262/km.
>
> So while its a fair assessment that broadband in the US is very bias to
> ignore some of the other factors involved. Another mistake I see people
> keep making is in comparing the cost of broadband in the US in $USD to
> other countries around the world. The cost of broadband in Estonia is only
> about $30/month. OMG, I can't believe broadband is cheaper in Estonia! What
> people ignore is everything is cheaper in Estonia, the average household
> income in Estonia is $14k vs $55k here. By that measure broadband is more
> expensive for families there than it is in the US. This is another point
> people repeat without bothering to qualify. This would be like my
> grandfather comparing the costs of a candy bar from back when he was a kid
> to today but ignoring inflation.

I might be willing to accept this argument if it weren’t for the fact that rural
locations in the US are far more likely to have FTTH than higher density areas
because the whole USF thing has inverted the priorities.

I live in the largest city in the bay area, yet there is only one facilities
based provider in my area that can deliver 2mbps or more and that’s over
HFC. Twisted pair is abysmal and there is no fiber.

The situation is not significantly better in the densest city in the bay area, either.

South Korea averages 4x US Speed for an average $28.50/month.
US averages 1x US Speed for an average $45.50/month.
(http://edition.cnn.com/2010/TECH/03/31/broadband.south.korea/)

Korean average annual wage: $36,757 @ 21% tax = $29,038 take-home.
US Average annual wage: $55,048 @ 29.6% tax = $38,753 take-home.
(http://en.wikipedia.org/wiki/List_of_countries_by_average_wage)

So that says KR take-home wage = ~75% of US wage.
75% of $45.50 is $34.125

So 4x speed is still approximately $5 cheaper per month in KR than in the US.

Owen