I've read this same article for the past 10 years now and every time I ask the question: what about fees and taxes Europeans pay apart from their bill? The US system is horrible but I think for a complete picture it would be good to know exactly what taxes and fees pay for the infrastructure in other countries.
As a kid in Germany every household with a radio or TV had to pay a fee to operate those devices and there was a constant barrage of ads reminding new households to register and pay up. I'm assuming there are also other taxes that flow into building communications networks in Europe.
You're comparing apples and oranges. The TV licenses are funding for the public broadcasters to provide programming. They do not go towards laying cables into people's home for cable tv reception and do not fund cell phone towers. It is quite irrelevant to bring into this issue.
In American terms: The TV license pays for PBS programming, it's not a subsidy for Comcast to lay cables.
Not quite right. For the UK, £300 million of the licence fee budget (over the next couple of years) will pay for the roll out of high speed internet to rural communities. I doubt the BBC wanted to do it, but it looks like they'll be subsidising ISPs.
How is that different, from the US system? We pay cable companies $80/month, and they pay $60 to content producers. Does it really matter that Downton Abbey is publicly (ITV) funded, and Breaking Bad is privately (FX) funded? The £145.50/year UK color TV licensing fee must be included when comparing costs.
A similar thing happens with the discussion about gas prices, except the schema is reversed. In Europe, infrastructure fees are paid at the pump. In the US, a lot of our income taxes go to paying for those road fees and maintenance.
I was a bit skeptical that road costs took a lot of our income taxes, so I looked it up. It was, at least, more than I thought it'd be. The U.S. will spend $65.3 billion of income tax payments on ground transportation costs in fiscal 2012, at least half of which is on highway costs.
I think pricing for a lot of things has a large component of historical pricing in it.
My favorite example: the price of books in the US and Canada. Just grabbed a random recent hardcover off my shelves. It's labeled "USA $25.95 Canada $32.50". I believe that price differential got established back when the US dollar was worth $1.25 Canadian -- but it still exists, even though the two currencies are now roughly on par. It's the exact same product with what is effectively a 25% markup for Canadians for no good reason.
True, but that's true in the US too. Unless you're suggesting many bookstores in Canada routinely offer a 25% discount on most books, my point still holds.
In theory, yes. But it hasn't been raised since the 90's and since it's a per-gallon tax and not a percent tax, its funding has decreased as Americans buy more efficient cars and thus fewer gallons of gas. I don't have links, but I've seen graphs indicating that the fund regularly runs at a shortfall now, and getting worse.
UK: The TV licence costs £145.50 per year. The bulk of this goes to the BBC to produce TV and radio programmes and to operate their network of transmitters. None of this money is going for Internet connectivity to homes so far as I am aware.
The 'local loop' to the home is provided by Openreach(BT) who have to make connections available to any company at an appropriate rate. There are also cable TV networks in many towns and cities.
No such fees and taxes on radio or TV in The Netherlands, income tax was raised a little when it was abolished, but income tax compared to the US is already higher due to the amount of social net that exists for the Dutch populace.
The amount of fees and the costs I pay in America versus what I would pay in The Netherlands is absolutely mind-boggling.
> The amount of fees and the costs I pay in America versus what I would pay in The Netherlands is absolutely mind-boggling.
Are you including health insurance? I'm pretty sure that I'm paying significantly less in taxes in the UK than I would be in the US with federal and state taxes plus health insurance.
Your employer might pay for health insurance, of course, but someone is paying.
What about fees and taxes Europeans pay apart from their bill?
I'd also like to see a fairer comparison here. If telecommunications infrastructure in these leading countries was subsidized by tax dollars, as the following article suggests they were, those payments should also be figured into the price of internet. These numbers are harder to get, but you're right that omitting them is disingenuous.
Yes, but I think he's speaking about some other taxes, like the infamous (to french people) "redevance audiovisuelle". The ~120€ tax that you pay annually for owning a tv set. But actually, here in France, this tax only subsidize the French Movie Industry and the Public TV Channels (Fr2, Fr3, Fr4, FrO, Tv5, France24 etc.), not the broadband connection.
Still, the broadband connection is subsidized by the gov, so somewhere there are taxes being collected to pay for it. But does it justify the 4 fold price markup in the US ? I don't think so.
I pay around $10/month for phone line and around $10/month for unlimited 8mb adsl internet in the UK (annoyingly, I'm just out of fibre region where it would be faster).
I'm not aware of paying anything extra for fees, nor being forced ads.
That fee in Germany is not a connection fee, though. It is used to finance national television and radio. I still don't like it, and it has some scammy aspects.
OK, but we generally can't get foreign speeds at any price. It seems that other countries are getting something for what they pay, whether retail or by tax.
Can't watch the video right now, but the summary at the bottom mentions France and Bulgaria - does it bother to mention the geographic differences between the US and those countries? I feel like a broken record every time this discussion comes up, but no comparison is complete without addressing the differences in geographic distance and population density that US providers are dealing with.
Every analysis I've seen does compare geographical differences, and finds that that's not a major factor. If that was a big factor then you would expect that either 1) the US northeast is a hotspot of cheap high-speed internet, or 2) there are no regional providers and the national providers are required to have the same coverage for all their customers. This is not the case.
Why doesn't NYC have 100 MBit to the home, when Singapore (population 5 million) does, and can get it for US$50/month?
Looking now, Cablevision serves the New York tri-state area. Their fastest rate is $45/month for "50 Mbps for downloads and up to 8 Mbps for uploads." Comcast has a much larger range. They offer 50 Mbit for $115/month and 100 MBit for $200/month.
Telia is a Swedish ISP. They offer 100Mbit for $50/month and 100/100 for $60. That's for the cities. So we see that a Swedish ISP can provide higher bandwidth, for cheaper, than two of the ISPs in the biggest metro area in the US.
I then pulled up Telia's numbers for the town of Skurup, population 10,000 in the Swedish countryside. They are limited to 30Mbit, also for about $50/month.
The south of Sweden is densely packed, for Sweden, with 290 people/sq mi in the county. The country is 54/sq. mil. That's about the same density as Pennsylvania. Is it possible to get 100 megabit to your home in Pittsburgh? For under $100/month? Likely not. Why not, when it is possible in mid-sized Swedish cities?
As a kid in Germany every household with a radio or TV had to pay a fee to operate those devices and there was a constant barrage of ads reminding new households to register and pay up. I'm assuming there are also other taxes that flow into building communications networks in Europe.