ISPs Say They Don’t Make Enough Money
I wish that the EFF had actually taught people the math of running an ISP, rather than just writing a puff piece.<p>Here&#x27;s Comcast&#x27;s Form 10-K for 2017: <a href="https:&#x2F;&#x2F;www.cmcsa.com&#x2F;static-files&#x2F;111ba611-eb85-4edc-9000-3907c84697d8" rel="nofollow">https:&#x2F;&#x2F;www.cmcsa.com&#x2F;static-files&#x2F;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&#x27;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 (&quot;Receivables, net&quot; of 8.4 billion).<p>Comcast had 41 billion dollars of &quot;Residential&quot; revenue last year, but only 14.7 billion dollars of that was for Internet.<p>The big expense line item is 13 billion on &quot;Programming&quot; (aka, TV stations from the other conglomerates, for people who haven&#x27;t cut the cord yet). There&#x27;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 &quot;customer premise equipment&quot; (which is probably cable modems and set-top boxes), and another 2.4 billion on &quot;scalable infrastructure&quot;, which is the actual &quot;paying money to make your internet better&quot;. 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&#x27;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&#x27;s less money to upgrade the equipment every year. That can&#x27;t possibly look great for shareholders.