Broadband In Crisis: Does The US Need Regulation To Force Meaningful Competition?

from the two-internets dept

Susan Crawford believes telecommunications in America are going through the biggest crisis ever, and this is just as bad as the banking crisis was. Monday, at the Freedom 2 Connect conference, the Internet law scholar and former Special Assistant for Science, Technology and Innovation Policy at the White House, laid out what's wrong with broadband in America, hinting and what needs to be done to fix it. It's not going to be easy.

"The stakes are extraordinarily high, this has been an incremental crisis for a long time but now it's an actual crisis," said Crawford, whose book analyzing these issues, Captive Audience, will be published in November. The central issue is the so-called digital divide and what Crawford refers to as the "looming cable monopoly." Due to deregulation, which was predicated on the premise that the free market and competition would protect consumers, cable companies have found themselves with an inordinate amount of power to control the Internet and broadband access while, at the same time, traditional phone companies like AT&T are struggling to keep up and veering towards wireless services.

To support her thesis, Crawford presented some stunning numbers. In the last two years, Comcast market share has grown from 16.3 million subscribers to 18.5, a 14 percent growth. Time Warner Cable has grown 10 percent, from 9.2 to 10.7 million customers. Meanwhile, DSL subscribers have plummeted: AT&T and Verizon market share is down 22 and 21 percent respectively.

So, while it's good to be Comcast, it's not good to be an American citizen. Without competition, there's no drive to improve the service. The average speed of an Internet connection in the United States is around 5Mbit/s. An astoundingly low number if you look at other western countries. South Korea, for example, has an average of 50Mbit/s. And faster connections are starting to be implemented around the world. One gigabit connections are available in countries like Japan, Portugal or Sweden and at much better prices than in the U.S. – in Hong Kong, connecting at one gigabit per second costs $26 a month while in Chattanooga, TN, it costs $350.

What does this mean to the average citizen? It means the United States are giving up their leadership. Crawrford said this means “the next Google won't come from America.” And, even within U.S. borders, there's a fundamental problem: you either pay premium for a mediocre service or you are left behind.

“We end up with two Internets, two societies in America,” Crawford said to me in an interview.

One America does some tweeting and Facebook on their inferior, slower wireless devices. The other America not only gets to enjoy video online, but they can also apply for jobs, do video-conferencing, get an education online and, ultimately, live in the 21st century. Crawford argues that this digital divide ends up creating inequality between the haves and have-nots in America.

The only solution, Crawford argues, is for the government to intervene and regulate. Internet access, particularly high-speed access, should be treated “as a utility, just as electricity, gas and water.” Doing so would make the Internet a natural monopoly in which the government would provide the pipe and guarantee equal opportunity of access to everybody.

It might not happen immediately, but Crawford hopes that, with her influence and that of other thinkers like her, this will come to the forefront of the public discussion. She believes that, eventually, in every district, there will be elected officials who understand and care about these issues. That will be when we'll be able to look for a solution. "We make this a voting issue, that's how we fight back."

Filed Under: competition, freedom 2 connect, hong kong, internet law, japan, portugal, south korea, susan crawford, sweden
Companies: comcast

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  1. identicon
    Anonymous Coward, 25 May 2012 @ 1:47am

    Re: Re:

    Is New York smaller than Tokyo or London? or less dense populated?

    That is not a consideration, since the backbone in America is suffering from an over abundance of bandwidth, America has the most dark fiber build up in the whole world.

    Which shows the infra-structure is already in place, other companies just don't have access to it.

    Which brings up Moore's Law to fiber optics where bandwidth capacity doubles every nine months. For fiber that means the same fiber already in the ground can double its speed every nine months, there are no technological barriers there.

    With that in mind, one has to wonder where the real bottleneck is happening, it is not in the infra-structure, is in the regulation structure, it is on the business side of things that were badly implemented.

    The government should own the way and force everybody to play by the same rules, the participants of that scheme would naturally keep an eye on the government against undue influence and the government would have no reason to favor one over another without being called out and so would have less interest in hearing only one company and hopefully would mind only enforcement of regulations that benefited the whole ecosystem of players that it cultivates.

    That is exactly what Japan and the UK did, Canada did something similar but allowed the sharing to have price competition and so the players forced to share their fiber priced others out of the market, Australia actually is building an entire network from the ground up instead of dealing with regulations nightmares and if all goes according to plan and they don't screw it up they will own the infra-structure and every player will have to fallow the same rules having to compete on the service side of things with an interest on keeping the whole infra-structure in good condition and expanding it.

    I see this an open source kind of thing, the code(fiber) is owned by everybody and it is equal to everybody else, everybody contributes to it so it stays relevant, and people build services around it, it stimulates local investments, it doesn't siphon resources from all areas to one single point.

    At the very, very least the governmet should build up the channels where the fiber goes and make it easy so anybody could lay down fiber, that is the pricey thing in the whole scheme, rights of way, licenses and so on are the real show stopper, France for example have an easy way to lay cable underground they had already tunnels build in the 19th century running all under Paris and so it is cheap to lay fiber there anybody who wants to put fiber just needs to ask for permission to put cable there.

    Companies use those expenses to keep out competitors, this is what is killing American broadband, people who want to put fiber don't have a place to put anything new because ways are already owned by someone that doesn't want them there and that is a problem for competition.

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