Internet in The US: Slow and Expensive

Watch and get angry:

A few morceaux choisis:

“It’s fair to say that the U.S. at the best is in the middle of the pack when it comes to both the speed and cost of high speed internet access connections. So in Hong Kong right now you can get a 500 megabit symmetric connection that’s unimaginably fast from our standpoint for about 25 bucks a month. In Seoul, for $30 you get three choices of different providers of fiber in your apartment. And they come in and install in a day because competition’s so fierce. In New York City there’s only one choice, and it’s 200 bucks a month for a similar service. And you can’t get that kind of fiber connection outside of New York City in many parts of the country. Verizon’s only serving about 10 percent of Americans. So let’s talk about the wireless side for a moment, you know, the separate marketplace that people use for mobility. In Europe you can get unlimited texting and voice calls and data for about $30 a month, similar service from Verizon costs $90 a month. That’s a huge difference.”


BILL MOYERS: Why is there such a disparity there?

SUSAN CRAWFORD: The difference in all of these areas is competition and government policy. It’s not magical. Without the intervention of the government there’s no reason for these guys to charge us anything reasonable or to make sure that everybody has services.

BILL MOYERS: How do you explain that in the course of one generation, from the invention of the internet in this country to falling way behind as you say the rest of the world in our access to internet? How did that happen?

SUSAN CRAWFORD: Beginning in the early 2000’s we believed that the magic of the market would provide internet access to all Americans. That the cable guys would compete with the phone guys who would compete with wireless and that somehow all of this ferment would make sure that we kept up with the rest of the world. Those assumptions turned out not to be true. It’s much cheaper to upgrade a cable connection than it is to dig up a copper phone line and replace it with fiber. So the cable guys who had these franchises in many, most American cities, they are in place with a status quo network that 94 percent of new subscriptions are going to. Everybody’s signing up with their local cable incumbent. There is not competition for 80 percent of Americans. They don’t have a choice for a truly high speed connection. It’s just the local cable guy. Competition has just vanished.

BILL MOYERS: Well, the 1996 Telecommunications Act was supposed to promote competition and therefore protect the consumer by bringing prices down. That didn’t happen?

SUSAN CRAWFORD: That didn’t happen because it’s so much cheaper to upgrade the cable line than it is to dig up the copper and replace it with fiber. The competition evaporated because Wall Street said to the phone companies, “Don’t do this, don’t be in this business.” So you may think of Verizon and AT&T as wired phone companies, they’re not. They’ve gone into an entirely separate market which is wireless.

They’re the monsters on the wireless side that control two thirds of that market. So there’s been a division. Cable takes wired, Verizon/AT&T take wireless. They’re actually cooperating. There’s a federally blessed non-compete in the form of a joint marketing agreement between Comcast and Verizon. And so the world is perfect for them, not so great for consumers who are paying more than other people in the rest of the world for slower service.

BILL MOYERS: Since the 1996 Telecommunications Act which I thought was going to lower the price of our monthly cable bill, it’s almost doubled.

SUSAN CRAWFORD: Well, that’s because Time Warner controls Manhattan. There’s no competition. The cable guys, long ago, something they call “the summer of love,” divided up—

BILL MOYERS: “The summer of love?”

SUSAN CRAWFORD: Yeah. They clustered their operations. It makes sense from their standpoint. “You take San Francisco, I’ll take Sacramento. You take Chicago, I’ll take Boston.” And so Comcast and Time Warner are these giants that never enter each other’s territories.”

The political consequences:

SUSAN CRAWFORD: Comcast is not only the nation’s largest broadband distributor with tens of millions of customers, it also now owns and controls one of the four media conglomerates in America, NBCUniversal. That means that it has a built-in interest in making sure that it shapes discourse, controls programming all in the service of its own profit-making machine. As both the distributor and a content provider, it’s in its interest to make sure that it can always charge more for discourse we would think isn’t controlled by anybody. So it’s a tremendous risk to the country that we have this one actor who has no interest in the free flow of information controlling so much of high speed internet access.


SUSAN CRAWFORD: This is a moment when we have to separate out content from conduit. It should not be possible for a local cable actor or any distributor to withhold programming based on volume. That’s what’s going on. The programmers say, “We’ll sell to Comcast cheaply ’cause they’re big. But if you’re an upstart we’re going to charge you three to four times what Comcast is paying for the same programming.” That should not be legal. Everybody should get access to the same stuff at the same price and they should be announced prices.”

And we also find the familiar revolving door in the power elite:

BILL MOYERS: You describe something in your book that we’ve talked about often at this table. Quote, “The constant easy, friendly flow between government and industry in the communications world centered around Washington D.C.” Describe that world.

SUSAN CRAWFORD: It’s a warm pond of familiarity. Everybody knows everybody else. They’re all very nice people, you’d like to have a drink with them. They go from a job inside the regulator to a job in industry to a job on the hill, one easy flow, nice people. Outsiders have no impact on this particular world.

And it would be– I talked to a cable representative not long ago about the need to change this regulatory state of affairs. And she looked at me and said, “But that would be so disruptive.” And she’s right, it would be disruptive.

BILL MOYERS: Well, you know, the F.C.C. was supposed to be the cop on the beat of the communications world. But for example Michael Powell, who served as F.C.C. chairman for four years in the mid-2000s, is now the cable and telecom industry’s top D.C. lobbyist.

Meredith Attwell Baker who was one of the F.C.C. commissioners who approved Comcast’s merger with NBCUniversal, left the agency four months later to join Comcast as a highly paid lobbyist. That move infuriated media groups.

SUSAN CRAWFORD: But that warm pond of familiarity in Washington sees this as absolutely normal behavior. Just yesterday the former chief of staff of the F.C.C. left to be the general counsel of a regulated company. It happens all the time. And so in order to change this you’d have to make regulation of this area not be carried out by such a focused agency. Right now, the F.C.C.’s asymmetry of information is striking. They only talk to the industry. The community is all so close. In order to break that up you’d have to make sure you had a broad based agency seeing lots of different industries.”

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