We have an ISP in San Francisco and it really is a great business. Lots of long lasting recurring revenue and very low recurring costs--bandwidth is actually one of our smallest expenses. The biggest hurdle is really tapping in to the tribal knowledge on how to set up and run an ISP. You've got networking, provisioning, how to buy bandwidth, even what type of power plugs you need to have in your rack (spoiler: there are multiple and they are not all compatible). Besides the cost of initial deployment and setting up new customers, there's not a whole bunch you need to spend money on.<p>We really like the business, and more people really should start their own. The numbers make sense in a bunch of different markets and scales. If you deploy with fixed wireless, it brings the costs down to the 10's of thousands of dollars range. Laying fiber is obviously a lot more expensive, but not really necessary in most circumstances.<p>We're working on helping more people start ISPs-launching here on HN next week, but TechCrunch wrote about the project just now: <a href="https://techcrunch.com/2018/05/10/necto-looks-to-help-individuals-get-their-own-local-isp-businesses-off-the-ground/" rel="nofollow">https://techcrunch.com/2018/05/10/necto-looks-to-help-indivi...</a>
I wish that the EFF had actually taught people the math of running an ISP, rather than just writing a puff piece.<p>Here's Comcast's Form 10-K for 2017: <a href="https://www.cmcsa.com/static-files/111ba611-eb85-4edc-9000-3907c84697d8" rel="nofollow">https://www.cmcsa.com/static-files/111ba611-eb85-4edc-9000-3...</a><p>Yes, the majority of the expense for Internet is definitely the upfront cost of equipment (physically putting in the cables).<p>Cable companies borrow lots of money in order to do this -- Comcast's Form 10-K shows that they have 64 billion dollars of debt. In order to get bank loans that big, you need to show that you can pay it back. But they only have 3.4 billion in cash; the way they keep their balance sheet from falling apart is knowing you pay your monthly cable bill ("Receivables, net" of 8.4 billion).<p>Comcast had 41 billion dollars of "Residential" revenue last year, but only 14.7 billion dollars of that was for Internet.<p>The big expense line item is 13 billion on "Programming" (aka, TV stations from the other conglomerates, for people who haven't cut the cord yet). There's also 6.4 billion on tech support, and 2.5 billion on customer service. If you keep looking further, you see they spent 3.4 billion on "customer premise equipment" (which is probably cable modems and set-top boxes), and another 2.4 billion on "scalable infrastructure", which is the actual "paying money to make your internet better". The balance sheet shows ~38 billion on property and equipment, so maybe Comcast is upgrading, say, 5-10% of their network in a given year?<p>In my opinion, Comcast's real long-term business risk is the shifting revenue mix from Cable to Home Internet means that Comcast gets smaller cash flows, so there's less money to upgrade the equipment every year. That can't possibly look great for shareholders.
ISPs routinely invest in things that I didn’t ask for: “helpfully” trying to resolve my web typos to their own ad servers, trying to inject pop-ups into HTML streams, wanting to install unnecessary software to “use the Internet”, expecting me to rent equipment that could be bought, etc.<p>Meanwhile, there is little evidence of investment in things I actually expect an ISP to do. No upgrades to quality of service (except that fateful day when Google Fiber came to town and “miraculously” everything improved practically <i>the next day</i>). Not even an <i>option</i> to have cheap, basic Internet, which you <i>know damned well they CAN do</i>; instead, ridiculous things like “only if bundled with a landline phone” (WHAT?!?). One mystery fee after another. Absolute garbage service, everything from “we will arrive between 1 and 5” meaning “we showed up at 11:30 and you weren’t there, reschedule”, to phone calls about service outages that they seem to be utterly clueless about. A single customer probably gives them at least $1000 a year, what the <i>hell</i> do these people do?
They aren't only lying about not making enough money. They are "lobbying" to keep up this charade.<p>Many European nations have much cheaper and faster access to the internet with many more ISPs. I don't see a logical reason why US can't have the same.
Aren't most if not all of Large ISPs public companies? They answer to the shareholders... Their business model revolves around making their shareholders the most amount of money possible. The company answers to the shareholders.<p>A Municipal ISP are mostly non/low profit, they have no share holders to pay out. No one looking for their 'investment' back as capital, just people looking for stable internet. The Muni ISP answers to the customers.
I feel that if you put this in front of a CEO of an ISP he will really not understand it. It is so very, very common in business world that you find an argument to ask for more money, which is why you will ask for more money. The question for business people is not the truthfulness of the reason, but how believable it sounds.<p>And if you try to counter that with truth and succeed you will really irritate these business people. Because now they need to go and find another good-sounding reason to ask for more money.<p>Truth or not, that is really invisible to them.
I agree with the EFF on a lot, but there was a dearth of numbers in this article. Does anyone know of any numbers to actually back up, for instance, the 80% claim that the writer makes regarding the cost of initial buildout? Additionally, how would that apply to each individual ISP?<p>The article also asserts that, "a small handful of massive and extraordinarily profitably Internet service providers (ISPs) are telling state legislatures that network neutrality would hinder their ability to raise revenues to pay for upgrades and thus force them to charge consumers higher bills for Internet access". Does anyone have an actual example where this has happened? I'd expect the author to at least throw in a link to a news article somewhere. Almost every article the author has written for the EFF is related to Net Neutrality, I'd think he'd have plenty of resources to show us.<p>Also, while I'm not entirely sure how EPB built their network out, Sonic is a terrible example even by the information given in the article. First of all, when almost the entire cost of starting your business is already paid for you, you're doing to have lower costs than someone who actually has to build conduit to lay fiber. On top of that, Sonic's service seems to be entirely concentrated in an extremely small, very high population density area. When you have 2000 customers on a single city block, you're going to have a lot lower costs than a company that has one customer every quarter mile.
If ISPs are so profitable, and the current government is falling for their lies, then ISPs are probably a great investment?<p>You could buy some Comcast stock (NASDAQ: CMCSA) - it's a bargain right now, down 20% in the past year. Compare vs. the NASDAQ composite index, which is up 20% in a year.<p>Actually, the more I look at it, they might actually be a good investment after this 2018 correction. I do not have any vested interest in Comcast, but I might make a very small investment after reading this article.
There were some profit margins of big ISPs published - they are insane, and near monopoly situation makes it pretty bad, when ISPs rip off users left and right.
Imagine what it costs to build roads, have drinking water, sewage or electricity. ISP = tiny boxes. The starting cost should be a lot higher.(could be a lone) That way we don't have to rent forever. We don't hook up your house to the sewage system for free either. After you sink many thousands into the sewer it gets rather amazingly cheap.
A lot of ISPs are public companies, so not sure why EFF didn't just dig up their 10-K filings?<p>Sonic.net is a pure broadband provider with pretty good introductory deals for 1Gbp internet in the Bay Area.[1]<p>2017 Revenue - $477M<p>2017 Net income - $64M<p>2017 Profit margin - 13%<p>13% isn't bad. It's more than low margin businesses, but doesn't seem egregious to me.<p>[1]<a href="https://www.last10k.com/sec-filings/sonc/0000868611-17-000050.htm#s25116AD284A52DF0AF7209AA5F359A14" rel="nofollow">https://www.last10k.com/sec-filings/sonc/0000868611-17-00005...</a>
I am no fan of ISPs, but this is a silly argument to make. There is no "enough" when it comes to capitalism. Your problem should be with either the politicians for believing these arguments or with our entire economic system, not with ISPs for lobbying on their own behalf in this manner.
What's this "enough"? No for-profit entity makes "enough" money. It's a concept that doesn't exist.<p>Put in real competition and supply-and-demand takes care of "enough".
Yikes, this article is so myopic. They treat large "ISPs" as if they are a single independent entity. The largest ones are owned and operated by gigantic corporate interests, and their sales figures are part of a broader plan, and thus so is pricing. The profits of "EPB Fiber Optics" don't go towards paying for content rights worth billions of dollars a year.<p>The larger the network, the more expensive it costs to maintain and upgrade. Of course a tiny regional co-op ISP doesn't cost much to run. They don't have 25 million customers in 21 states, or 145,000 miles of fiber in 39 states.<p>I mean, jesus, this article goes all over the place. It's saying provisioning isn't expensive, and suggests that deployment cost is lowered by changing building codes to require conduit. How does that affect the 91 million homes that already exist?<p>The article states that net neutrality <i>"prohibits [ISPs] from charging unjustified fees on Internet services"</i>. No, it doesn't. They can charge whatever they want for their services. They <i>will</i> increase the price of internet services whether or not net neutrality exists, because it is not getting any cheaper to run a giant ISP that is responsible to the shareholders of a media conglomerate.<p>If the author really thinks the <i>only</i> reason big ISPs charge high fees is because they're mean and greedy, they really are going to lose this fight, mainly from a lack of critical thinking skills.