U.S. Internet Users Pay More for Slower Service - Bloomberg - 0 views
www.bloomberg.com/...y-more-for-slower-service.html
internet policy competition regulation telecom access
shared by Javier E on 01 Jan 13
- No Cached
-
The arrival of commercial Internet communications in the mid-1990s posed a threat to both the phone and cable companies; eventually, the FCC deregulated the entire sector, thinking that competition among various modalities of Internet access --cable, phone, wireless, satellite -- would protect Americans. And in 2002, when the five-year period of deregulation began, there was indeed rough parity in speed and price between the cable companies and telephone companies providing Internet access.
-
Soon, however, cable companies found a way to upgrade their networks to provide connections perhaps 100 times faster than what was possible over copper wires, and at much lower expense than the phone companies incurred replacing their phone lines. Goodbye, Copper The American copper wire telephone system is, in fact, becoming obsolete. The physical switches used in the network are reaching the end of their useful lives. But now that cable has won the battle for wired Internet service and consumers are moving to mobile phones for voice service, the telephone companies are looking to shed the obligation to maintain their networks at all.
-
Meanwhile, the U.S. is rapidly losing the global race for high-speed connectivity, as fewer than 8 percent of households have fiber service. And almost 30 percent of the country still isn’t connected to the Internet at all.
- ...6 more annotations...
-
Other countries have different goals. The South Korean government announced a plan to install 1 gigabit per second of symmetric fiber data access in every home by 2012. Hong Kong, Japan and the Netherlands are heading in the same direction. Australia plans to get 93 percent of homes and businesses connected to fiber. In the U.K., a 300 Mbps fiber-to-the-home service will be offered on a wholesale basis.
-
In a sense, the FCC adopted the cable companies’ business plan as the country’s goal. The commission’s embrace of asymmetric access -- slower upload than download speeds -- also serves the carriers’ interests: Only symmetric connections would allow every American to do business from home rather than use the Internet simply for high-priced entertainmen
-
The first step is to decide what the goal of telecommunications policy should be. Network access providers -- and the FCC -- are stuck on the idea that not all Americans need high-speed Internet access. The FCC’s National Broadband Plan of March 2010 suggested that the minimum appropriate speed for every American household by 2020 should be 4 megabits per second for downloads and 1 Mbps for uploads. These speeds are enough, the FCC said, to reliably send and receive e-mail, download Web pages and use simple video conferencing.
-
Think of it this way: With a dialup connection, backing up 5 gigabytes of data (now the standard free plan offered by many storage companies) would take 20 days. Over a standard (3G) wireless connection, it would take two and a half days. Over a 4G connection it would be more than seven hours, and over a cable DOCSIS 3.0 connection, an hour and a half. With a gigabit fiber-to-the-home connection, it can be done in less than a minute.
-
If the U.S. had a fully fiber-based network, Hollywood blockbusters could be downloaded in 12 seconds, video conferencing would become routine, and every household could see 3D and Super HD images. Americans could be connected instantly to their co-workers, their families, their teachers and their health-care monitors. To make this happen, though, the U.S. needs to move to a utility model, based on the assumption that all Americans require fiber-optic Internet access at reasonable prices. How much would it cost to bring fiber to the homes of all Americans? Corning Inc. (GLW), the American glass manufacturer, and others have estimated that it would take between $50 billion and $90 billion.
-
The Internet has taken the place of the telephone as the world’s basic, general-purpose, two-way communication medium. All Americans need high-speed access, just as they need clean water, clean air and electricity. But they have allowed a naive belief in the power and beneficence of the free market to cloud their vision. As things stand, the U.S. has the worst of both worlds: no competition and no regulation.