US broadband: Overpriced, Underpowered and (for once) Over There

Martyn starts his recollection of the history of ISP a bit late in time. We once had a vibrant ISP market before the telcos and MSO demolished the competition with superior speeds at competitive prices. Now we mostly have duopolies. Although Tim Wu’s report is generally accurate, he did not write anything about our static market that was not known before his report. Martyn’s typically European solution is more regulation, but it is the regulation and laws that have been put in place that prevent carriers and cities from building open-access fiber infrastructure by forming consortia or partnering along with arcane franchise regulation. 

We are challenged by geography in the U.S. that makes deploying fiber much more expensive than in most other countries. Elimination of the barriers that will allow carriers and cities to work together to build and share the last-mile infrastructure would encourage competition that will benefit all stakeholders.

By Martyn Warwick

As an Englishman and therefore, a European (by dint of geographic proximity if nothing more)  who is a very frequent visitor to the United States, I have, over many years now, been able to make my own informal comparative study of the state of the Internet on both sides of the Atlantic. My conclusion is this: in almost all circumstances the US Internet is slow, cumbersome and damnably expensive and in the Global Broadband Stakes, it comes in way down at the end of the field, a knackered, blowhard also-ran.

Leaving aside for the moment my pet hobby horse – the extortionate rip-off prices charged for feeble and sluggish Internet access in many of the biggest US hotel chains – and letting it chomp away on the astroturf outside the Marriot Gaylord Opryland in Nashville where it can continue grazing whilst simultaneously irrigating and nourishing the roses, a new report confirms the popular belief and prejudice that Internet speeds and access prices in the US can’t hold a candle to what pertains over in Europe and Asia.

“The Cost of Connectivity” report, newly published by the Open Technology Institute of the New America Foundation, compares Internet access in US cities with cities in Europe and Asia. It makes depressing reading for America. The US lags much of the rest of the world not as a result of inferior technology but because there just isn’t sufficient competition in the marketplace to force the fat and lazy monopolies and duopolies that dominate the SME and residential broadband internet access sector from their monied torpor. It is a state of affairs that, if not addressed, will have serious long-term economic consequences for US competitiveness.

As Tim Wu, an erstwhile advisor to the US Federal Trade Commission and now a Professor at Columbia Law School, says, “It’s  very simple economics The average market [in the US] has one or two serious Internet providers, and they set their prices at monopoly or duopoly pricing.” That’s the basic reason why the US so obviously lags behind so many other countries when it  come to Internet speed and affordability. In America it can take 20 time longer to download a film than it does in Hong Kong, London, Paris, Seoul, Tokyo or Zurich and it costs 10 times as much.

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About Mark Milliman

Mark Milliman is a Principal Consultant at Inphotonics Research driving the adoption and assisting local governments to plan, build, operate, and lease access open-access municipal broadband networks. Additionally, he works with entrepreneurs and venture capitalists to increase the value of their intellectual capital through the creation of strategic product plans and execution of innovative marketing strategies. With more than 22 years of experience in the telecommunications industry that began at AT&T Bell Laboratories, Mark has built fiber, cable, and wireless networks around the world to deliver voice, video, and data services. His thorough knowledge of all aspects of service delivery from content creation to the design, operation, and management of the network is utilized by carriers and equipment manufacturers. Mark conceived and developed one of the industry's first multi-service provisioning platform and is multiple patent holder. He is active in the IEEE as a senior member. Mark received his B.S. in Electrical Engineering from Iowa State University and M.S. in Electrical Engineering from Carnegie Mellon University.
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