So wouldn't it follow that:
<Big Business> "Here, little guys, buy our bandwidth. We have the good stuff here.
<Little Guys> "Well, this internet is cheap, but there's ads... meh I can live with that."
<ISPs> "Hey, you can't do that!" *provides cheaper bandwidth*
Well, Guild, it's not really as simple as all that. If you're reselling bandwidth to a downstream customer, that means your upstream provider is getting its beak wet too. And in practice, when they offer cheaper Internet, it's cheaper by just enough to run the entrepeneur out of business, at which point they jack their prices back up.
A more detailed summary follows, as I reply to Constantine.
I dunno if that's accurate, but I'm fairly sure all of this will have been made moot once someone invents (my first point was that net neutrality will prevent the birth of:) a faster, cheaper, wireless, long-distance ISP
Hm, yes, net neutrality clearly limits innovation. Why, the last thirty years we've had it, the Internet has been utterly stagnant!
Seriously, I'm...I'm
here. Do you even understand the subject we're discussing, or is this another "the judge wouldn't let Superman into the public domain" situation where you're arguing something you haven't even bothered to examine on a cursory level?
Net neutrality means ISP's don't discriminate on bandwidth -- every port, every protocol, and every IP gets the same data transfer speed. What on Earth do you think that has to do with the development and deployment of new hardware for providing Internet access?
<Startup ISP> These guys charge a lot for internet, I'll provide it for cheaper but without as much profit margin!
* Big Name ISPs lower costs enough to undersell Starup ISP just long enough to force Startup ISP out of the market, then raises their prices again, claiming it's for better service and to provide you, the customer, with everything you need to blah blah blah
All right. We have hit on a subject I have intimate knowledge of.
I've worked at a startup ISP. Everything you've said is right, but it's only part of the picture.
You want to resell DSL in Phoenix metro? That means you're reselling Qwest DSL.
I would just like to emphasize that.
The company whose line you are using, as a startup ISP...is the big dog you are trying to compete with.
So Qwest gets its money either way. Qwest is getting something in the neighborhood of $20 a month for the line, no matter who the company is providing service over that line.
So guess what? You want to charge your customer $20 a month for Internet? That means the customer's paying $20 to Qwest and $20 to you. You want to charge less? Okay. At what point does it become an exercise in futility? $5 a month? Most people charge $15 a month for dialup, fer Chrissakes. (Which, incidentally, is a whole other story; dialup is pure profit. But that's a tangent.) $5 is probably about the point where you're even with Qwest (at least for the first year, after which they jack up their prices). $5 a month. Great. Good luck paying your employees on that.
It gets better. As Qwest expands into new areas, it offers ADSL, a higher-speed service. Which it doesn't resell. So all the new developments? You're frozen out. You can't offer service there.
Adding insult to injury, let's say your customer has a problem that's not your fault -- DSL modem dies, line's severed, whatever. Say you refer that customer to Qwest support. What do you suppose Qwest's going to do? If you guessed "try to convince them it's your fault and that they should switch service," you win! So I hope you're ready for a conference call so you can get Qwest to help your customer without cockblocking you out of his business!
So those are the obstacles to operating a successful high-speed Internet startup in this area. I can't say for certain that they're insurmountable, but my opinion as somebody who's been there is that it's a fool's game.
Guild's not entirely wrong when he says that a startup could find good business if it deployed a wireless network smartly. The trouble, of course, is range. There are new businesses popping up right across the street from my old workplace that could benefit from a wireless connection from there, but you start talking about places that are even half a mile away, you've got to start talking about repeaters. It's not impossible, but it's tough.
It also has fuck-all to do with net neutrality.