Is the Free Market Slowing Down Your Internet?

fiberWhen you compare the price that most Americans pay for Internet service, and the speeds they receive for that price, the U.S. is far from a leader in deploying the most important utility of the 21st century. The New York Times’ Claire Cain Miller recently explained why the U.S. has fallen so far behind in Internet speed and affordability. 

Miller discussed a recent report comparing Internet access in large American cities with those in Europe and Asia. The results aren’t pretty. Some of the cities with the most cost-effective Internet service are those like Lafayette, La., and Chattanooga, Tenn. The reason? Those cities have city-run utilities or startups providing service. Others, such as Kansas City, are test beds for high-speed internet being developed by Google — also not a traditional internet service provider.

In my Texas Monthly piece last year on Google Fiber coming to Austin, I noted that the rollout of high-speed internet in the U.S. is following a similar path to that of electricity in the 1930s. Electric grids were controlled by large monopolies, and the availability was limited. Only after politicians got involved and local governments established city-run utilities or rural areas for cooperatives did electricity deployment become widespread.

Susan Crawford, a former science and technology policy adviser to President Barack Obama and author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age told me:

This is the most important input into twenty-first-century businesses, yet we are stumbling along, waiting for these mammoth companies to decide that it’s in
their best interest to make these upgrades. We’re going through all the steps that we went through with electricity.

We want to believe that the free market will address this problem, that competition will emerge that will improve service and lower costs. But that’s happened in only a few select areas. Once again, rural communities are being left even farther behind.

“The free market only does well with things like connectivity,” Crawford said. “We are dooming our own private marketplaces.”

In my own experience, I depend on the Internet to do my job, both via the computer and over the phone. Yet my provider, Comcast, has been plagued by frequent outages, one of which lasted five days. For a while, my outages were almost a monthly occurrence. Yet the only other alternative in my area is AT&T U-verse, which is slower than the service I have now. Despite widespread dissatisfaction with the options, no other company has entered the market to provide an alternative.

As a result, Comcast feels no pressure to improve its service or reduce its prices. Until we find a way to change the landscape, America will continue to fall farther behind in its connection with the world.

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About lorensteffy

Loren Steffy is a writer, speaker and consultant. He is the author of Drowning in Oil: BP and the Reckless Pursuit of Profit published by McGraw-Hill in 2010 and The Man Who Thought Like a Ship, published by Texas A&M University Press in April 2012. A journalist for more than 25 years, he was most recently the business columnist for the Houston Chronicle.
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One Response to Is the Free Market Slowing Down Your Internet?

  1. dw says:

    markets with monopolies or high cost of entry never seem to do well without being forced too.

    Like

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