As reported by Common Dreams:
The New York Times reported on Wednesday that the U.S. has sunk to 25th in a global ranking of Internet speeds, just behind Romania. Why? Because our nation’s regulators abandoned an earlier commitment to foster competition in the marketplace for Internet access providers.
Here’s the problem: Most households in the United States have little-to-no choice when it comes to land line broadband:
The lack of competition has turned America into a broadband backwater. In the aftermath of the FCC’s decisions, powerful phone and cable companies legislated and lobbied their way to controlling 97 percent of the fixed-line residential broadband market — leaving the vast majority of consumers with two or fewer choices of land-based providers in any given market.
This article links to a Free Press publication, “Dismantling Digital Deregulation: Toward a national Broadband Strategy,” which tells us what deregulation has brought us:
Almost right out of the gate, the Bush administration’s FCC declared war on competitive ISPs. It quickly decided that even though the cable platform had transformed into a two-way communications medium, cable companies didn’t need to abide by any of the pro-competitive requirements of the 1996 Act. The FCC also decided that incumbent monopoly phone companies would no longer be required to provide competitive broadband ISPs wholesale access at reasonable rates and conditions. This abandonment of “open access” policy flew in the face of congressional intent and doomed the competitive ISPs to irrelevancy and bankruptcy. Meanwhile, overseas, other countries maintained this commitment to competition and reaped the benefits.
The OECD countries with open access policies have broadband penetration levels nearly twice that of countries without these policies. Citizens in the countries with open access policies also get more broadband bang for their buck. For example, consumers in countries with “line sharing” open access policies pay about $14 per Mbps; consumers in countries without these policies pay more than double this amount. The FCC, in its blind pursuit of deregulation, abandoned line sharing and other open access policies in the hopes that this “regulatory relief” would inspire incumbents to make massive investments in broadband infrastructure. But this hope, based in part on the promises made by the incumbents to get favorable FCC treatment, turned out to be completely false. An examination of the data reveals that the pace of broadband deployment was no different in the years before major FCC broadband deregulation than it was in the years after. States like Virginia and Maine saw no improvement in deployment, while in some states like Nebraska, things actually got worse.
The FCC also justified its abandonment of competition policy by arguing that the incumbent phone and cable companies would offer third-party ISPs wholesale access on favorable terms, even though they weren’t obligated to do so. In retrospect, letting the fox guard the henhouse was a colossal mistake. An examination of the offerings of the few remaining third-party broadband ISPs illustrates the obvious: that incumbents have absolutely no reason to offer their competitors favorable wholesale rates. For example, Earthlink still resells Time Warner Cable broadband service, but the monthly rate is so high that no consumer in his or her right mind would pay it. Earthlink’s 7 Mbps tier costs consumers nearly $30 more than if they bought it from Time Warner Cable directly, while the lowest-price tier is nearly 20 percent cheaper if purchased from Time Warner Cable. In many cases, once they were granted relief from providing reasonable wholesale access, incumbents refused to offer wholesale altogether or jacked up the rates so high that third-party ISPs would lose money.
Tim Karr of Free Press reports that the FCC’s newly released broadband plan is severely lacking on some of the most pressing issues:
Judging from the back-slapping and high fives over at the FCC, you’d think that America’s Internet was sailing smoothly into the future. Think again.
With much fanfare on Tuesday, FCC Chairman Julius Genachowski delivered the National Broadband Plan to Congress, saying it will help make Internet access faster and cheaper for everyone in the United States. Getting more people connected to high-speed Internet — from the 65 percent currently online up to 90 percent of households by the year 2020 — is Job One, according to Genachowski.
There are a lot of good things in the plan’s 376 pages, including pledges to reform the Universal Service Fund and to re-allocate spectrum for broadband. But the plan glosses over some of thorniest problems plaguing U.S. Internet users: high prices, slow speeds and a lack of choices among providers.
Internet access in America is held captive by powerful phone and cable interests. And regardless of what the laissez-faire editors at the Wall Street Journal think, doing nothing to protect people from getting ripped off is not an option.
I haven’t yet reviewed the FCC plan, but this report concerns me–Free Press is a highly trusted source regarding media reform. Once again, it appears that the needs of individual citizens are about to take the back seat to corporate interests.
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Article on the Broadband Plan written entirely from the opinions of two professional telecom analysts-for-hire, declaring the broadband plan “impossibly broad” although no portions of the plan are yet publicly available for “analysts” to inspect.
This is a great opportunity for all of us to be media watchdogs, and to strike back at the the constant flow of trite garbage, the drummed up conflict and the dishonest and lazy announcements that all purport to be “news.”
Free Press recently published a report on the state of national broadband indicating that a central failure of our communications policy is the lack of broadband competition.
For nearly a decade, the debate over broadband competition in Washington has been an increasingly tortured game of pretending we have broadband competition in America when almost any consumer can see that we clearly do not. We used to have competition: In the Telecommunications Act of 1996, Congress implemented a system that required telecommunications network owners to share their infrastructure with competitive providers. But in the years that followed, the powerful incumbent monopolists used the courts and the FCC to kill this regulatory system. As the rest of the world was successfully adopting this competitive model we invented, our leaders were abandoning it. Instead, they bet that competition between cable and telephone networks using different technologies would work out just as well. It didn’t.
Now the world’s leading broadband nations overseas are enjoying healthy broadband competition that has triggered higher speeds, lower prices, and wider deployment. In the United States, we’re 10 years behind, and we’re stuck with a market structure that is very difficult to steer back to where we were before we went off course. The facts on the ground are stark. Here in the United States, the duopoly phone and cable incumbents control 95 percent of the entire wired and wireless high-speed Internet access market. Prices are on the rise, and the incumbents have executed a deliberate strategy to slow innovation and deployment, hoping to squeeze every last dime out of yesterday’s technologies.
What the FCC should do: First and foremost, the FCC should make a clean break with the policies of the past eight years and declare that our broadband competition policy is a failure.
Josh Silver of Free Press tells us why metering threatens the Internet
Cable companies Time Warner and Comcast, and phone giants AT&T and Verizon sell the vast majority of high-speed Internet service in the United States. Phone and cable companies like these have no other competition in 97% of US markets, thanks to corrupt policies passed by the Bush Administration at the companies’ behest.
These duopolies are betting on the future of their “triple-play” phone-Internet-TV service, so that you’ll pay them more than $100 per month and they can keep earning record profits. They know that if you start downloading video from online innovators like Hulu.com and Roku.com, eventually you won’t need their expensive, advertising-ridden television service. If you decide to use online phone providers like Skype, you won’t need their expensive phone service. The answer? Jack up the cost of Internet, and once again eliminate the competition.
But that’s not all. Metering Internet usage also has ramifications for journalism.
We continue to learn about Madonna’s adoption problems and Ms. California’s old photos, but if you want substance in your news, you’ll have to look beyond corporate media’s steady stream of sensationalism, celebrity gossip and product placement. We need fast, neutral, affordable Internet that can deliver video, audio and other multimedia to enable efficient production and distribution of journalism and other educational content.
If I’m reading Silver correctly, he’s not totally against all surcharges for truly high-volume users. And it does make sense, in the abstract, that those who barely use any bandwidth would pay less than those who stream videos and music all day. But I agree with Silver’s concerns that the telecoms need to be closely regulated on this issue. But who would do the regulating, given that the telecoms have successfully purchased undue influence over Congress with their ostensibly legal campaign contributions? It seems as though we need campaign finance reform before we’re going to have Congressional independence on any issue.
On a separate issue relating to media, consider listening to Arianna Huffington’s testimony before the Commerce Communications subcommitte, chaired by Senator John Kerry. She makes many worthy points. I am concerned, though, that she is overly optimistic that journalism would thrive in a world without newspapers. Based on what I see, much of the Internet is filled with content that has its origin with traditional newspapers and news magazines. Many these newspapers are doing terrible work because they’re laying off reporters and because they put profits way ahead of journalism. Yet I’m not convinced that Internet news sites are ready or able to step into the void to do this job well enough on the scale handled by traditional media outlets. I hope I’m wrong about this–I hope that we are about to see a golden age of Internet journalism–because I don’t see newspapers ever making a big comeback.
What’s up with media reform? Free Press is active on many fronts. Click on this video to hear Josh Silver’s two-minute message regarding many of the most pressing issues.
I’ve found Free Press to be a terrific organization providing numerous ways for thousands of journalists, citizens and citizen-journalists to exchange ideas for improvement of our news-gathering and publishing. I’ve attended the past three Free Press national conferences, each of which drew several thousand people. I highly recommend that you visit the Free Press website and get involved.
Here’s a terrific article by Tim Karr of Free Press. Why not exert some intelligent political will and make certain that blistering high-speed broadband is available to anyone who wants it at a reasonable price? Karr’s article comes with some disturbing statistics: Access to broadband today is held in the grip of the cable and [...]