America Missed the Broadband Revolution

The International Telecommunications Union now ranks the United States as the 15th country overall in broadband Internet penetration. This means that the county that actually invented the Internet is refusing to develop and grow with the technology. South Korea boasts an Internet connection 15 times faster than the United States in their average apartments, and France offers similar services at half the rate US customers are paying. US customers pay twice as much for half the speed of Asian and European users.

Some experts claim a lack of strategy in America is behind the Internet growth lag, others feel that the government’s current “hands off” approach has been the primary issue. A strong argument for a lack of competition has also arisen.

Cable and telephone companies currently control 97% of the residential broadband market (Public Knowledge). This includes Cable Internet and DSL, with the other 3% of the residential market going to other technology that is usually slower and more expensive. It is probable that the only reason Satellite internet service survives in smaller markets is simply due to the fact that no Telcos or cable companies want the customers. Wireless was heralded as the new broadband equalizer, but the two largest wireless providers also own the DSL market as well. In many large markets with millions of available customers only one cable Internet provider is available. The estimated population of Dallas Texas and its surrounding suburbs is 18 million people. A single cable provider, Time Warner, is available in this market.

Businesses do not fair much better. Many office building have only a single provider to choose from for DSL or cable, and the same DSL provider would be the Telco that would provide a T1 pipe to the company. This situation has lead to overcharges that have reached the billions of dollars.

So broadband Internet is too slow and at too high a price, and customers have no competitive resources to call on for relief. Is this actually a problem for the United States? President George W. Bush said in 2004, “We ought to have universal affordable access for broadband technology by the year 2007 and then we ought to make sure, as soon as possible thereafter, consumers have choices when it comes to their carrier.”

Michael Copps, the FCC commissioner also said in 2006, “Even in cities and suburbs, the fact that broadband is too slow, too expensive and too poorly subscribed is a significant drag on our economy. Some experts estimate that universal broadband adoption would add $500 billion to the U.S. economy and create 1.2 million jobs.”

If this estimate is anywhere near the mark then it is obvious the time to make a change in the United States broadband market is now. One answer would be for the FCC to step in and begin to regulate pricing as well as competition. Broadband Internet must be looked at as more than a luxury item, and as a catalyst to create jobs, increase the wealth of the country, and help increase the level of education in America.

About the Author

Jon Norwood is a founder and managing partner of the directory Cable Internet, a site dedicated to providing information on Internet Service Providers, as well as guides on how to best choose a service.