Saturday, February 15, 2014

How America Is Falling Behind in High Speed Internet Access

The Internet was born in America. It was given to the world for free, but now, a handful of giant companies, together with ineffective government policy, have managed to place the US far down on the list of internet accessibility and affordability. We are in 16th place, behind countries like Sweden (in first place), Holland and Japan. Even Portugal has faster and cheaper internet connection than we do.

In her book 'Captive Audience: The Telecom Industry and Monopoly Power in the Gilded Age', Susan Crawford describes how the American Internet service is falling behind other nations due to an abundance of greed, but especially due to a lack of vision.

She compares the Internet to other basic utilities, like water and electricity. 'We seem to have forgotten' she says, 'that when it comes to these basic services, we can't create a level playing field for all Americans or indeed compete on the world stage without having some form of government involvement. That's how we did it for the telephone, that's how we did it for the federal highway system.'

There is a clear difference in vision between countries that are working towards building an internet infrastructure accessible to all and the hands-off approach that America has taken. Leaving it up to the private sector has allowed a few companies to extract enormous rents and enormous profits, from what should be considered a basic service.

Before broadband, dial-up went through the phone lines and the Federal Communications Commission had clear authority to regulate it. But then, cable companies started to offer internet access. They were not considered 'common carriers, like the telephone, so the FCC decided that what they offered was not a 'telecommunication service' but an 'information service' and that they didn't have to be regulated.

Talking about gagging yourself voluntarily. The reasoning behind this decision was that it would promote competition, but the exact opposite happened. A few mega firms emerged (Comcast, Verizon) with less and less chance for a new kid on the block to make it. Since the FCC cannot regulate the internet, a company like Verizon doesn't have to share its lines and can remain the dominant player. Compared to Britain, where there are 400 ISP (Internet Service) providers, the United States only has a handful. In the Boston area, where I live, I have a choice between Comcast, a cable company and Verizon, a telephone company. They are duopolizing the local market.

Because of the ensuing abuse of power on the part of these giant companies, the FCC came up with a new 'Net Neutrality Ruling', preventing ISP's from playing favorites. Now the U.S. Court of Appeals for the District of Columbia has logically decided that the FCC can't deregulate the Internet with one hand and, with the other, require that service providers treat all traffic equally. The only sensible thing for the FCC to do after this defeat, is to re-label these services as 'telecommunications services' and regulate them. Our future depends on it.

What American policymakers don't understand is that access to information is like access to oxygen. That oxygen needs broad arteries to flow. Instead of creating laws that require everyone to have access to the internet, just like laws requiring everyone to have access to a telephone, the FCC is bowing to the pressure of a couple of giant ISP's, just like the robber barons of lore.

Greater regulation is essential to make sure that everybody gets high-speed access. The other option, is to just leave these greedy giants behind and build better alternative networks in each city in America, to get out from under the thumb of the cable monopoly. If not, America will become a Third World Country when it comes to communication and there will be a lot of talent and innovation that will never see the light of day. leave comment here