WSJ Says Gov't Money Injection Won't Help Broadband

olddotter writes "According to the WSJ, The US government is about to spend $10 Billion to make little difference in US broadband services: 'More fundamentally, nothing in the legislation would address the key reason that the US lags so far behind other countries. This is that there is an effective broadband duopoly in the US, with most communities able to choose only between one cable company and one telecom carrier. It's this lack of competition, blessed by national, state and local politicians, that keeps prices up and services down.' Get ready for USDA certified Grade A broadband."

Comments

Natural Monopolies

[sterno]

The problem is that there's a natural monopoly because of the physical impediments to connecting a dwelling to the network. I have three wires coming into my home:

1) Power line
2) Cable line
3) Phone line

It would be prohibitively expensive to set up the infrastructure to connect me to yet another line and that's what would be necessary to have true competition.

To understand the problem, compare what we have in broadband service to the way that dial-up worked. In the dial-up market there were thousands of competitors because while local phone carriers provided the phone line, they had no control beyond the last mile. You could connect to compuserve, AOL, or hundreds of independent ISP's. The result was increasing speeds (within the physical limits of the phone wires) and declining prices.

With broadband, you have the cable companies who have monopoly control over their wires and you have the phone company that has an effective monopoly. Yeah, I can get DSL from other providers, but the phone company deliberately interferes with this and because of their control of the local pipes, can generally offer cheaper service. So while you have competition, in theory, between DSL and cable, as a practical matter it's nonexistent.

There's potential for competition from wireless and that's somewhere the government can do a lot to help. However, wireless will always be slower than a wired connection, and ultimately if I want wireless I'm looking at the same companies who currently provide DSL service (AT&T, Verizon, etc).

Re:stuff that matters

[tuxgeek]

"Of course WSJ says this."
If I'm not mistaken, Rupert Murdock owns the WSJ
No wonder they would come out with something like this