How The FCC Has Failed To Take On The Real Broadband Issue: Competition... And Why

from the follow-the-money dept

Way back in 2005, we pointed out that all of these fights and discussions about "network neutrality" were missing the point. They were fighting a symptom, not a disease. The real problem in the US is the lack of competition in the marketplace for broadband. Despite the twists and turns industry lobbyists will claim, true competition just isn't there, and the FCC has done nothing to address that (even though, its own "reclassification" plans earlier this decade in large part created the problem). The current flare up about net neutrality has again been a silly fight that we've barely even covered, because none of it addresses that lack of competition.

Finally, some are noticing. Scientific American has an article pointing out that other countries have a lot faster speeds, at a lot lower costs -- and the key point is that they have a lot more competition:
Phone companies have to compete for your business. Even though there may be just one telephone jack in your home, you can purchase service from any one of a number of different long-distance providers. Not so for broadband Internet. Here consumers generally have just two choices: the cable company, which sends data through the same lines used to deliver television signals, and the phone company, which uses older telephone lines and hence can only offer slower service.

The same is not true in Japan, Britain and the rest of the rich world. In such countries, the company that owns the physical infrastructure must sell access to independent providers on a wholesale market. Want high-speed Internet? You can choose from multiple companies, each of which has to compete on price and service. The only exceptions to this policy in the whole of the 32-nation Organization for Economic Co-operation and Development are the U.S., Mexico and the Slovak Republic, although the Slovaks have recently begun to open up their lines.
The article's authors complain that in the fight over net neutrality, the FCC has carefully avoided tackling this issue, and suggests it may be because of the political power of AT&T and Comcast. Thankfully, Broadband Reports drives home the point of why politicians won't take on AT&T:
Some (like plan architect Blair Levin) will tell you the FCC simply didn't want a legal battle and that the die had already been cast. On the other hand, Levin and company didn't even bother to try. When a company like AT&T is not only the biggest campaign contributor in any sector and an integral part of your country's sometimes legal intelligence gathering operations, there's not a lot of people in DC rushing to stand up to them.
This is really disappointing. The whole net neutrality battle has been a silly side show while the rest of our broadband infrastructure has suffered. It's time we had real leadership in our government that got past the interests of one big company -- but that seems unlikely to happen any time soon.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Oct 6th, 2010 @ 9:13pm

    The govt only seeks to serve the plutocracy that it enforces and that's about all it's good at. How many MSM media outlets are there? There used to be 40, now there are like 5 (Verizon, Time Warner, Murdoch which owns fox, Disney, and one more I can't remember off the top of my head), much of which was funded by the govt and the govt imposes these monopoly restrictions on us. The public is robbed blind and they are blinded by a broken media structure that intentionally keeps them ignorant.

    reply to this | link to this | view in thread ]

  2. icon
    Jay (profile), Oct 6th, 2010 @ 9:23pm

    Here's a question

    How the hell do you take on AT&T when they lobby and campaign to your political party and are the biggest bullies with the largest stick on the block?

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, Oct 6th, 2010 @ 9:25pm

    You see if they didn't even change some laws for net neutrality, this competitive things has no chance, because it will need change in the laws and the public failed to show them they want change.

    Talking failed, elections will fail.

    If people really want change there is only one route, and that is to build their own, with their own money.

    Waiting for some sort of help from above ain't gonna happen.

    reply to this | link to this | view in thread ]

  4. identicon
    PRMan, Oct 6th, 2010 @ 9:47pm


    "Verizon, Time Warner, Murdoch which owns fox, Disney, and one more I can't remember off the top of my head"

    I think you meant Viacom and you forgot Sony.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, Oct 6th, 2010 @ 11:44pm

    I said it before and I'll say it again: This country's legal and political systems are nothing but a sham, they have been for over 100 years, and nothing will change as long as the concept of "campaign contributions" as legal bribery continues to exist.
    Thankfully, with the internet around, this situation is becoming increasingly obvious to more and more people. Hopefully some political party (probabliy the Libertarian party, from what I've seen) will capitalize on this. The US is essentially a plutocratic ogliarchy right now, but its foundation is still a democratic republic, and getting enough right-thinking people elected could still change the game.

    reply to this | link to this | view in thread ]

  6. identicon
    Christo, Oct 7th, 2010 @ 12:04am

    America gets what it delt

    After decades of supporting and uplifting currupt regimes all over the world americans are finally figuring out that their governtment is currupt. Sheeple syndrome.
    And besides you lot really have nothing to complain about, in South Africa we pay more for less internet. For R349(bout 50USD) per month I have a "384KB" connection that most days acts like a 256KB connection if im lucky, this is a VERY recent uncapped option.
    When during the day countrywide you have 0-10KBps downloads for "broadband"....THEN you can complain.

    reply to this | link to this | view in thread ]

  7. identicon
    TFP, Oct 7th, 2010 @ 3:17am


    Britain isn't much better, we have BT (previous government operated monopoly), which goes to nearly every home with ancient wiring, and optical cable which covers cities and large towns with no plans to expand. and whilst many companies can lease the BT line to offer varying broadband prices, they're still constricted to the physical speed of BTs infrastructure - which is crap. Oh yes, they are upgrading certain bits to offer 20Mb pipes, but generally in the areas that already have cable.

    reply to this | link to this | view in thread ]

  8. icon
    farooge (profile), Oct 7th, 2010 @ 5:43am

    Someone explain

    Why I should teach my kids to vote when it's just not true?

    I think I may teach them to get rich and buy whatever laws & regulations they desire. I can show them lots of examples - left, right and center

    I'm not kidding folks.

    reply to this | link to this | view in thread ]

  9. icon
    Dave Records (profile), Oct 7th, 2010 @ 6:11am

    Broadband Competition

    I have argued for years that the only way to make competition happen is to have the "last mile" be owned and operated independently where providers can go to a local access point. The end user thus has a choice of who is going to provide that bandwidth on his pipe. Laws have been passed to allow long distance on telephone lines, electricity and heating gas, why not the cable lines? Or the lawsuits against local governments installing their own fiber loops should be absolutely thrown out of court.

    reply to this | link to this | view in thread ]

  10. icon
    Greevar (profile), Oct 7th, 2010 @ 6:14am


    Legalized bribery doesn't help the situation much, but Al Franken has been fighting hard to stop the Comcasts and AT&T's from taking over. I wasn't sure about the guy to begin with, but he's been making me glad he won the election.

    reply to this | link to this | view in thread ]

  11. icon
    Greevar (profile), Oct 7th, 2010 @ 6:16am

    Re: America gets what it delt

    Oh, we knew. We just didn't know how or why they were corrupt until the internet came along.

    reply to this | link to this | view in thread ]

  12. identicon
    Anonymous Coward, Oct 7th, 2010 @ 6:20am

    Republican appointees. Leave it the same or go backwards.

    reply to this | link to this | view in thread ]

  13. icon
    Rambo919 (profile), Oct 7th, 2010 @ 7:12am


    True, its only when I got internet access that I started to realise how much my own country was lying to me. The night news allways is so optimistic...if only because mostly only happy topics are ever used.

    reply to this | link to this | view in thread ]

  14. icon
    Rambo919 (profile), Oct 7th, 2010 @ 7:18am


    Britain and America is extremely lucky that they have even small levels of competition. In South Africa there is ONE power company and ONE Fixed line telephone company....and government owns significant portions of stocks in both.
    We are sucked dry to just get the necessities and they barely ever bother branching out logically, when they do of course it happens with great fanfare and empty promises.

    reply to this | link to this | view in thread ]

  15. icon
    Hephaestus (profile), Oct 7th, 2010 @ 7:55am

    Re: Here's a question

    Quantum Entanglement Communications ...

    reply to this | link to this | view in thread ]

  16. icon
    marvin25 (profile), Oct 7th, 2010 @ 9:52am


    There is competition and the big boys are not happy as they losing each time they compete with them. The ISP works thru the electric coops and is the fastest growing ISP in the country. They are trying every method to stop them and they can't stop them as electric coops fight for them. Cable and telecoms have to go into negative income wherever they go and they have to abandon their plat and equipment and sell for scrap. You should understand this is happening in rural America and they are getting a better system then the cities and suburbs in rural America of Internet and communication. So your explain is no longer valid and they are also the biggest consumer of bandwidth in the country. They are major users of their own VoIP and Vonage and Netflix has almost 90 percent of their business with this ISP. Get use to the fact that rural America can compete with the cities and suburbs as they have the Internet and communication required and as much as they need from this ISP. It is a new world out there which was not mention.

    reply to this | link to this | view in thread ]

  17. identicon
    Anonymous Coward, Oct 7th, 2010 @ 10:12am

    "In such countries, the company that owns the physical infrastructure must sell access to independent providers on a wholesale market."

    In Britain, only 1 company has to sell access to independent providers and that is BT Wholesale which is a remnant of the original state owned near monopoly telephone service provider.
    Cable companies, like Virginmedia are not obliged to provide access to anyone in any circumstances.

    reply to this | link to this | view in thread ]

  18. identicon
    Anonymous Coward, Oct 7th, 2010 @ 10:18am

    Re: #36521

    "with no plans to expand"

    BT are set on rolling out FTTC and for some FTTP will become a reality all at a total cost of £2.5bn
    You may not like them and fair enough, but they definitely have very detailed and costed plans to expand and are actively doing so.

    reply to this | link to this | view in thread ]

  19. icon
    art (profile), Oct 7th, 2010 @ 11:42am

    FCC's #epicfail

    The reality is that there are two votes on the FCC to start enacting the types of policies to enable broadband competition. Commissioners Michael Copps and Mignon Clyburn are ready, willing and able. One person is holding it all up -- Chairman Julius Genachowski. He actually proposed ways to deal with it but now refuses to go through with the votes necessary because of protests from Congressional Democrats who take the phone company line. Here's our latest post, of many, on this tragedy: Art Brodsky Public Knowledge

    reply to this | link to this | view in thread ]

  20. identicon
    EorrFU, Oct 7th, 2010 @ 12:27pm

    God bless Verizon?

    I was lucky enough a few years ago to have Fios come to town. And wow is it great. Over the next month the HD offerings tripled and my modem speed was doubled at no charge. I moved to a less nimble cable market, chose Fios, and just got my 3rd free upgrade to my internet speed. I signed up for 2 years of 10mbps and less than a year later it is at 25mbps. Competition works.

    reply to this | link to this | view in thread ]

  21. icon
    DanVan (profile), Oct 7th, 2010 @ 1:40pm

    To this day, I can't help and laugh at these pure free-market fans that want zero government rules/regulations with these gigantic, over-powerful companies that simply do their best to get as much money as possible out of their consumers

    As shown by a recent verizon case, they get it through fraudulent ways some times.

    reply to this | link to this | view in thread ]

  22. icon
    Derek Kerton (profile), Oct 7th, 2010 @ 4:01pm

    I've Been Trolling Techdirt With That Topic for Years

    This sounds a lot like an Scientific American article based on my Techdirt comments:

    Who do I sue for copyright infringement and stealing my idea?

    reply to this | link to this | view in thread ]

  23. identicon
    Jake Warner, Jr., Oct 8th, 2010 @ 6:46am

    My 2 cents

    I've suggested for decades that will the only method to help make competitors happen will be to achieve the "last mile" be held as well as controlled independently wherever providers can turn to an area accessibility place. The end consumer therefore features either who is going to offer that will bandwidth upon their tube. Regulations happen to be passed allowing long-distance in cell phone traces, electricity and also heat gasoline, have you thought to the particular cable tv collections? Regards, provillus

    reply to this | link to this | view in thread ]

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