Report card of American telecoms: They flunk out

May 11, 2011 | By | 2 Replies More

The few remaining American telecoms want American consumers to focus only on options that they want to offer us. But we know how to use our slow American Internet to check out how other developed countries are developing their broadband coverage and speed.

At Alternet, David Rosen and Bruce Kushnick have issued a devastating report card to the American telecoms. Here’s the bad news:

  • America is now 15th in the world in broadband. While Hong Kong and other countries are rolling out 1 gigabit speed services, America’s average is a mere 5 mbps (i.e., 1,000 mbps = 1 gigabit).
  • Americans paid over $340 billion for broadband upgrades that never happened; by 2010, America should have been completely upgraded with fiber optic services to every home.
  • The FCC approved Comcast’s acquisition of NBC-Universal, foreshadowing a likely wave of integration of transport or carriage and content.
  • Together, AT&T and Verizon control 80 percent of all wireless services and AT&T is now attempting to close down one of the only remaining competitors, T-Mobile.

What should we do about this?   Rosen and Kushnick often many dramatic solutions–including divestiture–if only members of Congress would listen more to good ideas than to wads of cash handed to them by the telecoms.

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Category: Corruption, Internet, Politics

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (2)

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  1. Erika Price says:

    I am dismayed at the quality of internet service in the US. It is clear, I think, even to the average user that service availability, infrastructure, and quality have all fallen far behind in the past few years. It's even more dismaying to realize we aren't getting the service upgrades we are due, and which we've paid for.

    A friend of mine just finished a stint studying abroad in Poland. While there, he bragged to me that he could get a USB modem with a speed of 10mbps for the equivalent of $15/month. He assumed that similar services were offered in the US, with a faster speeds and better rates. Not so. In the United States, a USB stick with frustratingly-slow 4G coverage is still around $50 a month at least.

  2. Niklaus Pfirsig says:

    The problem lies within our economic structure. Once upon a time, businesses existed to provide goods and services for their customers. Competition kept prices low and mainly because of the localized nature of businesses, competition from other businesses kept prices low and the quality to price ratio maximized.

    The corporate global model, however, is a different beast entirely. Instead of existing to provide for the customer's needs, corporations exist to maximize the value of their stock for their investors. The customer base have become "market share" and are perceived in the corporate world as another resource to be exploited. Once the market (consumers) has had all the value (money) extracted, it is tossed aside and "new" markets are opened.

    Part of this has been driven by the deregulation of investment and securities. The deregulation has introduced a new breed of stock speculators (the quants) who use computer automation to trade stocks an incomprehensible speeds, and this has caused an instability in the stock markets. As a result, to maintain the value of their stock, corporations must not only show a profit each quarter, they must continually increase their quartly profit.

    Back during the Clinton administration, millions of miles of fiber optic communication cable, funded by government subsidies, was installed throughout the nation. We the taxpayers footed part of the bill. In the Bush administration, deregulation of the communication industry caused a shakeout of the small companies, and in the current corporate dominated political atmoshere, the telecoms have avoided infrastructure known as "Dark Fiber" largely because they can make more money by not using it, and by pushing for multitiered pricing of data services by claiming a limit on bandwidth.

    All is not lost, yet, Clear Communications (formed when Sprint bought into Clearwire) is testing 4g-lte (most 4g phone service is not really 4g) and it was recently revealed that Google has been buying rights to dark fiber in a planned bid to offer ultra high speed internet to concumers.

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