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Can the US Actually Cultivate Local Competition in Broadband?
New submitter riskkeyesq writes with a link to a blog post from Dane Jasper, CEO of Sonic.net, about what Jasper sees as the deepest problem in the U.S. broadband market and the Internet in general:
"There are a number of threats to the Internet as a system for innovation, commerce and education today. They include net neutrality, the price of Internet access in America, performance, rural availability and privacy. But none of these are the root issue, they're just symptoms. The root cause of all of these symptoms is a disease: a lack of competition for consumer Internet access." Soft landings for former legislators, lobbyists disguised as regulators, hundreds of thousands of miles of fiber sitting unused, the sham that is the internet provider free market is keeping the US in a telecommunications third-world. What, exactly, can American citizens do about it?
One upshot, in Jasper's opinion (hardly disinterested, is his role at CEO at an ISP that draws praise from the EFF for its privacy policies) is this: "Today’s FCC should return to the roots of the Telecom Act, and reinforce the unbundling requirements, assuring that they are again technology neutral. This will create an investment ladder to facilities for competitive carriers, opening access to build out and serve areas that are beyond our reach today."
Give both access to their current cable network. Watch service improve and prices drop.
The only real solution is to split the last-mile provider from the ISP, and make the last-mile provider a utility.
Competition in the last-mile is infeasable, but connecting customers at a CO to the internet is a much more competition-friendly possibility.
If I have nothing to hide, don't search me
You either:
- own the cables.
- provide internet access to consumers.
- sell content.
exclusively. No combinations allowed.
Due to a well known law of headlines I'd reply No, but if you copy Europe the answer will be Yes. In this case Europe has the advantage of a fragmented market. Different countries, different languages, different operators and different regulations led to competition. No pan-European monopolist.
I don't know if this is widespread (I think it is) but where I live (Italy) unbundling is mandatory and we have new operators using the cables of the former monopolist. In some areas the former monopolist is using the cables of newer companies. There are at least three different fiber networks, unfortunately not particularly fast. 100 Mb/s download and 10 Mb/s upload is the norm for fiber (ADSL goes up to 20 or 30 Mbps with the usual caveats of that technology). I got the feeling that the operators agreed to settle on that and save some money. Fiber was at 10/10 Mb/s 14 years ago. Competiion is never enough.
So, I don't recommend breaking up the US and switching to lots of different languages :-) but maybe you might break down your monopolists, create operators at state level and force unbundling. I read what happened to the Baby Bells and it seems that it worked well for a while. Do it again and by 2020 you'll evaluate what happened and adapt the legislation.
Same way the ideal gas situation of FCC doing its stuff and the invisible hand of the free market doing its stuff and presto you got fantastic internet speed at the low low price of 9.99$ a month. The real gas situation is, all these companies raking money hand over fist lobby the politicians, the FCC, create misinformation campaign and they continue to exploit their customer base. Pressure builds till some disruptive technology comes in, cherry picks the customers and they leave in droves.
One possibility: It could be cell phone companies stringing up fiber up to street corner pillar boxes, and do the last 100 yards over the air with WiFi or a femto-cell network or something. The only true advantage the cable/phone ISPs have is the actual wire to different parts of the home via cat5 cable. But most homes use a router and use WiFi anyway. Someone could run fiber up to street corner pillar boxes, install a WiFi router per customer and cherry pick lots of customers who don't need more than a few WiFi devices. Wireless in the loop is quite well known and is actually deployed in many parts of India and Africa. My old prof Ashok has been talking about it for a long time.
But there could be other such technologies that peel of some serious segments of the captive market of the cable giants. Cable giants too would not sit idle. They would be the first to spot the threat and possibly buy these companies, or adjust their prices in different markets to keep these dogs chomping at their heels just out of reach. Somehow or the other, where such technologies are viable prices would come down. Where it is not viable, the customers would be at the mercy of these corporations
FedEx and UPS are not serving 80% of the country (by area, probably 10% by population). But at least they get US Postal Service. But the current generation of ISPs are suing to make sure government does not provide an alternative even to the market they don't want to serve.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Legally, only one ILEC is allowed to run copper pairs to my property. They have no interested in upgrading their plant.
They have a protected monopoly.
In many jurisdictions, only one cable company can put coax in the ground.
They have a protected monopoly.
IP protections, like copyright, are a government protected monopoly.
Frequency allocations, overseen by the FCC, are a government protected monopoly.
Access Easements on private property for incumbent wire owners (e.g. the cable company can put a truck or a box on your property if they like) are a government grant of special privilege.
Given all of the government collusion with the current infrastructure, asking if government can address its own problems seems a bit silly. Of course it could. It could stop enabling all of the stuff it currently enables, for one.
If you try to factor the residential broadband problem into an OSI-type layer model, perhaps what makes sense is to limit vertical integration.
E.g. if there is physical plant, IP transit, content delivery, and content production, it would be problematic to allow, for instance, SONY, to own all 4 of those layers in some specific area.
Ideally there would be robust competition at each layer.
Another action the government could take would be to stop approving merger/consolidation deals that have the net effect of consolidating layers and/or markets in such a way that overall marketplace competition suffers.
In some communities, public utility ownership of layer 1 (physical plant) would make a lot of sense and would be voter supported. In others, it wouldn't, and wouldn't. Both models are worth trying.
As you go up the stack, there are lots of opportunities for different business models. Community owned IP transit? Why not? This is, in some regards, the case at current internet peering points. The members co-own the exchanges. It is in some respects like the agricultural co-ops that are so common in rural America - the land of rugged individualists.
People are, after all, not opposed to working in groups when they like the group and when the cooperation makes sense (as opposed to being coercive in nature)
My opinions are my own, and do not necessarily represent those of my employer.
STOP GIVING OUT CABLE MONOPOLIES.
That's really all you have to do. There is no competition in most markets because competition is banned by government decree.
I live in a town with two cable companies. Actually, I live 5 miles out of town. Both cable companies have fiber optic networks here, both have great customer service, high speeds, low prices, etc.
The city I lived in previously had granted a monopoly to Charter. Charter has a coax network, lousy customer service, low speeds, high prices, etc.
Cable + DSL is not a meaningful competition, so having 2 monopolies is not the way to go. Stop granting cable monopolies and you will have competition.
P.S. Both companies have fully developed fiber networks in the ground (and on poles in some places) so don't try claiming that the monopoly is necessary for physical reasons. It isn't.
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