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."
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Filed Under: competition, freedom 2 connect, hong kong, internet law, japan, portugal, south korea, susan crawford, sweden
Companies: comcast
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Re: Comp this...
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They contribute to campaigns and the monopoly continues...
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what we need is...
I guarantee one thing: if the current trend toward data caps, contracts with ETFs and higher rates is not reversed, it will have a significant impact on the economy in terms of limiting access to subscription-based and single-purchase based digital content, as well as surfing, shopping and social networking. And since all of those are clearly economic growth areas, well....
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Why doesn't the government try a utility based internet service while also competing with the private sector? You could get your cheap internet utility or opt for the faster business service providers?
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However, there are several posts made that the cable network is still rather backwards. That is one of the problems: cable has had no need to upgrade their infrastructure to fiber or anything else. I don't know if it were possible to have a 'nationalized' network infrastructure and individual service providers but I think a fiber network would be the first step in that direction.
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Now LUS offers much faster internet access than the companies that tried to shut them down. Currently you can get 75Mbps down and 75Mbps up for $100/month. The best the private ISPs can offer is 50Mbps down and 5Mbps up for $95/month and this is after they dropped prices and increased speeds.
So long story short, more competition makes for better cheaper service. Big surprise.
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Hurrah Hurrah Someone who appears to be on my side
While I agree more competition is needed, and will provide relief I believe that the break up of Ma Bell should be looked at far more closely, and learned from so we don't repeat those mistakes.
Where will this new competition come from ? Maybe Google, Maybe Apple, maybe someplace else, but asking the government to force competition into the mix will be a regrettable decision, if history is any teacher.
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Re: Hurrah Hurrah Someone who appears to be on my side
It seems to me that the relevant history here is landline telephones. Government forcing competition seems to have been a good thing for those.
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Re: Re: Hurrah Hurrah Someone who appears to be on my side
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No one will be able to build an entire network from the ground up to compete with others that already have that infra-structure in place, that is just not going to happen unless you are Google or have the same deep pocket.
In other countries this exact same approach worked wonders like Japan and the UK, it failed spectacularly in Canada because of the implementation and it remains to be seen how Australia will fare.
There is no competition in the American market, the cost to enter that market is high, the regulations are endless, the backdoor exclusive deals between individuals and institutions is rampant so if there are no regulations the future doesn't look good for the US broadband in the near future it could turn around for other reasons not known at this point, but nobody should hold their breadth waiting for it.
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True. This, and the need to prevent monopoly, are two good reasons why this should be a publicly-owned project.
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But I guess I am not sure which horse will win after writing that down.
But nationalizing would cut down the need for National Security Letters.
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Neither is ideal, but the government devil is 6 inches shorter.
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I doesn't go down quite as smooth as the Corporate Brand but
there's a lot to be said for tradition.
I say bending over and getting the shaft from a Brand that has all that brute Strength is very important.
Of course don't forget that the Corporate brand controls all the Vaseline
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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.
http://www.wisegeek.com/what-is-dark-fiber.htm
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.
https://en.wikipedia.org/wiki/Dark_fibre#Rate_of_expansion
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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Because of how we got here (single cable company monopolies for an area, and one phone company providing the copper wire connection) it leaves you with few choices. There isn't a single company out there right now with the money or the desire to replicate the networks these established companies have, for a small part of that market. It's not cheap to set up all that potential market without actual customers.
The last mile is the issue. It won't go away.
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True, but because of the actions of the telecoms, not any technical limitations. There are a number of ways that the "last mile" problem can be easily and cheaply resolved right now, form a technical point of view. But the telecoms fight against allowing anybody to actually do them because they want to maintain their monopoly.
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Good Ideas
I think a compromise could be something like what they have in the UK, where BT is forced to sell bandwidth wholesale (regulated price) to smaller (regional) companies that can then turn and attract subscribers however they can. iirc BT fought this hard at first but it has actually worked out for them pretty well (less overhead, more efficient now that they can focus more on just the infrastructure).
Projects like Google Fiber help too, but I don't think their scale is large enough.
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Econ 101
Verizon and ATT both have fiber offerings (FiOS and Lightspeed), but they are pricey compared to their DSL offerings and they don't want to cannibalize their own products, like when they didn't want to offer VoIP service.
It's basically that our broadband companies do not want to be good companies, they want to be wealthy companies. Yet another example of wanting to hold onto the old business models for as long as possible to the detriment of their customers.
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(*) regional tax from people in the Stockholm area.
My brother has this city net and he can change ISP on a monthly basis if he likes, with just a few clicks on an intraweb page.
My apartement building is already connected to the city net, but the switch is collecting dust in the basement because we are stuck in a 3 year contract with a telco who had their own fibre laid down to our building when it was built.
I have 100/10 and I pay about $48 per month for internet, tv (basic channel package only) and ip phone (my isp is one of the more expensive).
I see it as a nation doing smart investing - if you want lots of tax money, you want your citizens to do well in a global market that is increasingly less about physical goods. You want your citizens to be educated and on the internet.
Free education and healthy internet access is an investement that will pay off down the road.
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too many politicians getting kick-backs to want to bring serious internet speeds into being. although they are 'area specific', there are too many monopolies at work and there ain't no way that any will be relinquishing their hold any time soon. they think that their individual profits are what should be used to judge the US prosperity rather than the overall position in the international field. using that, E.Asia is kicking the US well and truly in the nuts!!
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Did I miss something in Geography?
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Re: Did I miss something in Geography?
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_sigh_
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RE: faster Internet?
even if Hell Michigan does freeze over, this aint gonna happen
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It should be a utility by now
Something I learned as a Comcast subscriber -- if you want better service, subscribe to their phone service (which is VOIP and is carried by their internet service). Both I and my mother subscribe to Comcast service in our respective homes (which are separate dwellings, thank you). We each had internet and phone service through them. When we had a problem, all we had to do was remind the customer service tech that we had phone service, and it was fixed the same day.
I've since gone to a much cheaper VOIP provider (about a third of the price for about twenty times more features). We had an internet outage just last week, and we were down better than 30 hours until they got around to fixing it, because they didn't provide phone service and didn't have that obligation. (Funny how that distinction is made.)
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Re: It should be a utility by now
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what a strange claim...
Due to deregulation? I am guessing this is a reference to the telecom act of 1996 but that completely ignores the fact that it was regulators that granted cable franchises exclusive territories in the first place.
Broadband in the US *is* a mess. And the cable companies *do* have too much power. But please lets all remember that this all started with government mandated monopolies and while it may require new regulations to fix the mess created by old regulations we should approach these solutions cautiously and reluctantly.
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Re: Size does matter.
If your ship is too big, it won't fit thru the Panama canal.
On the other hand, if your moped is too small nobody will want your help moving a couch.
Like, duh.
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Re: Re: Size does matter.
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howly mowly
Competition would be nice and will only happen if we just pull our collective heads out of the govs ass.
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Re: howly mowly
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WHAT WE DO NEED
150kb =/= 1.5mb.
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Re: WHAT WE DO NEED
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Re: WHAT WE DO NEED
I think you have your Bytes/bits units confused...
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Re: Re: WHAT WE DO NEED
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Btw, one major reason fiber is cheaper in Hong Kong is because people are packed together tightly, so cables don't have to be laid as far. Ditto Japan and Portugal. Try scaling better and tell me if China, India, Australia, Canada, Brazil, and Russia have fiber everywhere. If that answer is yes, then we're behind. Otherwise, what we have is an issue of broad coverage, which is going to be hard to finance. Who's going to pay for the extra half mile to reach that one house back in the woods? Or the tiny, poor neighborhood next to the old highway?
I think we should leapfrog, like many developing countries are doing. Make it about wireless, not wired, at least in low population density areas. Then go ahead and find a way to reduce the price and increase the competition among wireless carriers and device manufacturers.
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The densities are comparable and I understand that the rural areas would take years to get up to those speeds but our medium and large cities should be there already. There's no excuse except for us falling behind.
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Yes, they live in a rural area, but they lucked out big time. Except they didn't.
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There's also protocol overhead to deal with, but on the brighter side, many higher level protocols support inline compression now :)
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The internet saves lives
Some things are too important to be done simply for profit. That idea may seem way of base to you, but think for a minute. We trust our governments to manage our military, police, and fire departments to keep us safe. Those corporations are owned and operated almost universally by governments. They services save lives, and are too important to be done for profit.
Things like our water, sewage, electricity and telephone are frequently managed by private corporations. These corporations however are very tightly regulated by the local governments. Most of the time they have to ask for a bill to be passed to change their prices.
Our information networks both wired and wireless, have reached the point where they have become necessary for our society to function. I work for a Teleradiology company. Our newest service allows someone in a rural area with no qualified doctor nearby, to be diagnosed with a stroke, and saved by a doctor three thousand miles away. This business, and the lives it saves couldn�t exist without reliable broadband, and mobile networks. Even more lives could be saved if some companies were willing to sacrifice a little profit. They could give the whole nation a level of access and service, enjoyed by other, less wealthy nations. But they don't, because it isn't profitable. So people will continue to die, because it isn't profitable.
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Re: The internet saves lives
I think a bigger question might be how many in the public realized connections are so pathetic here?
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the exception was this: it was still considered a vital service and consequently regulated into the ground. combine that with a usage that lead to foreign technicians thinking the were running load tests when they first saw the exchanges running (they weren't) and they couldn't afford to slack of and still meet their minimum performance requirements.
for a long time there was only one competing company, and it only existed because part of the regulation was that Telecom (the privatized ex-post office entity) had to allow it to use the pre-existing cables and such.
cue wide spread public adoption of the internet. in the mean time the competing company has merged with another and changed names a couple of times, but is still basically the same entity. only now it has Money and there's Demand. it starts running fiber optic cables to the home, among other things, but still needs to use the main (backbone?) cables and interact with the exchanges. many retail level ISPs pop up offering different connection deals. the problem at this point became that Telecom was both a retailer in it's own right And a wholesaler so far as internet connectivity was concerned. this lead to some somewhat anti-competitive business practices. which lead to a bit of a scandle and was About to lead to a government investigation and probably forced break up.
to avoid that the company reorganized and split itself up. (into retail, wholesale, and 'all the random crap needed to make everything actually interact and work', so far as i can tell.) it's a bit complicated, (especially as there was then a government project that many different companies got involved in to upgrade everything which rearranged who owned what Again) but solved the problem.
meanwhile that other major competing company, somewhere along the way, went 'hey, we can run TV signals through this shiny fiber cable we've got here...' so, we actually have cable tv these days. if you sign up with them. it's just an alternate transmision medium for the standard satellite and free-to-air tower based broadcast channels you could get here Anyway, but it's slightly (read, single dollar numbers per month) cheaper to get tv and phone and internet through them than to get satellite tv and phone internet at the same performance level otherwise, and the reception's better. not enough of a difference to make people switch over, generally, but enough to make it a slightly better deal if you're setting up a New connection and want All of those things.
anyway, point of all this: the main backbone cables and exchange are pretty much a utility which is probably best run as a highly regulated monopoly (not actually by the US government, given how That seems to work, though if it weren't so blatantly corruption prone that would be best) but with minimum performance standards which are updated regularly, and never lowered, and a very close eye kept on it's pricing. i imagine a few hundred or more ISPs are a louder voice than one 'dumb pipe' company in that regard.)
Retail ISP services should be in free competition, and generally relatively small entities. if they run cable for themselves at All it should be only the last bit, and they shouldn't need to do That unless they want a performance advantage due to new tech or there simply Isn't such cable yet (the basic cable should be owned by the town or city or whatever, really). avoidable monopolies are bad, yo? corporations just make it worse.
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Fiber
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Comman Carrier
TITLE 2
Fix what Kevin Martin and his goons created by reclassifying them all under title 2 common carrier regulation...the FCC could do it without even making congress vote on it. Only problem is the FCC chairman lacks a pair and keeps forgetting he is a regulator
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This would take billions for a big city, but the government could recoup the costs over the next 10 years from the private companies offering the services.
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Internet speeds
We live in a country so blinded by its love for the "free market" that we define "vibrant competition" as three companies ... whether they compete or not, and we define whatever outcome we get as "the best" because the "free market" created it.
We have the "best" Internet service in the world, the "best" health care in the world, the "best" anything in the world. Just ask any republican. When you define whatever you have as "best" there is no reason to work for better.
At least the rest of the world is making progress.
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Sad Thing
I do think that it's kinda funny that people will say the government should take control of things, because lobbyists buy off politicians. Wouldn't putting those politicians in control of things only change the nature of the lobbyists and the corruption, and still allow people to control the market to their interests?
Either way, I hardly trust the government with the services they provide now. The extent that they want to take control and regulate the internet now is worrying enough. What the government would do if they had direct control of the internet is absolutely terrifying. The less the government has control of anything, and if they only had necessary regulations, I truly believe the better off we'd all be.
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Re: Sad Thing
Give me the government over critical infrastructure anyday. It's non-profit, for the good of the public (vs. stockholders), must be fair, and officials are representatives - voted in or out by the public. No it is not perfect, but it's relatively transparent in comparison to private corporations.
Private corporations have one mandate; make money for stockholders. The end.
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Monopolies
And, as with any natural monopoly, it makes sense to let the community control it. The city to control the cables in its ground, the state (or whatever bigger entity) the overland ones. That's not to say you should bar private entities from owning their own cables.
Now the service on these cables is something completely different. Everyone can do it; so there is no natural monopoly, and consequently the government should keep out of it. Some communities might opt to offer a service themselves, but they need to be very careful that they don't start looking at cables+service together as a profit-center, and thus impede service-providers which need to use the same cables. But with that a given, services offered by the community can be an effective competition to services offered by third parties, and thus lead service providers to be at least as competitive as the community-owned services.
The main problem with this setup is, that lobbying can lead to the creation of artificial monopolies. But then again, rent-seeking is a general problem everywhere, and not something that needs to be solved specifically for broadband access.
There are two very simple guidelines:
If there is a natural monoply, the community must hold it
If there is no natural monopoly, the community must do everything to prevent artificial monopolies
(Of course, things like "granting patents" fly totally into the face of the second one, as do a lot of "regulations" which are obviously only drafted to raise the market-barrier)
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Re: Monopolies
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Where I come from
I think that this opening of phone lines creates competition. I wonder if this would work in the USA.
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This is a crisis?
And this charlatan claims that we're facing a crisis akin to the banking collapse. Enough said.
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Re: This is a crisis?
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Re: This is a crisis?
Dude, I've never seen a better example that illustrates the concept that anecdotal ev is not ev.
An up-to 1.5 mbit is the best offered in my area for under $50/month -- And I live less than five miles from the center of the fourth largest city in the US.
People who live less than 25 miles from me can't even get what I have without being charged substandially more.
So yes, there's a problem.
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Re: This is a crisis?
I live in a near suburb of one of the largest and most tech-savvy cities in the country after silicon valley. I live about a half mile from the city limits. I can get fiber for $75/mo with a mandatory (unneeded) cable package, or I can stick with dsl at 125kps with phone (actually used sometimes) for $30/mo. And I consider myself lucky that I have two options.
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Economics of population density
The cost of getting service to everyone in Korea is similar to getting service to everyone in California, but only if they live in an area the size of South Carolina.
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This is why I don't trust big business
Any big company, tech-based or not, tends to morph into the same kind of monopoly if given the chance. Since my father was career military, I'm more comfortable with government-run programs than privately-run programs. Sure, the government screws things up, too, but in general, I think private companies are more likely to arrange things so that in the end they take the most from me and give me the least, because that's how they make money.
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Re: This is why I don't trust big business
If it's tax payer dollars supported, there should be an obligation to the public and that's what has been missing. The cable companies got stimulus money with no accountablity required. They lined their pockets with it.
If the internet is so important that it requires security legislation (SOPA/CISPA) then public investment in it should also be protected.
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Nationalize (eminent domain) the networks
Worked for telephone service, worked for Electricity - would work for Internet service and Cell service - imagine if all the cell networks were merged into one - the capacity we'd have, the reduction in costs and overhead.
Hmmm - imagine
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Video of Susan's talk
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Google says regulation not needed
No they went out to Kansas City and built their own fiber network. Susan Crawford should stop whining about the telcos, cable companies and lack of regulation.
Instead she should encourage others to do as google has done.
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Need to classify as a utility
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