Government to Blame for US Living in Stone Age of Internet Connectivity – Report

What could possibly be the reason why the US has such (loading article, please wait…)

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

There’s a fascinating piece on Engadget that discusses at length why many Europeans are paying less for faster internet connections than US citizens on average. The reason why this is the case, says the report, is one simple word: government.

As a case in point, the article discusses the situation in the UK because it was, at one point, like the US – little competition, high costs and poorer quality services. It wasn’t until the government forced the incumbent industries to participate in “local loop unbundling” and pushing competition in to the market that allowed internet speeds to rise and costs to fall. While not easy, the government took to embarrassing the company into submission before competition could be allowed in to the market place.

What I like in particular about the article is that it tackles on of the biggest reasons big telecom companies won’t allow people to have faster and better connection speeds – the land mass excuse:

AT&T takes a different tack: The firm says it supports competition, but notes that, “There is no ‘one-size fits all’ regulatory regime” that will work worldwide. AT&T cites two main differences between the UK and U.S. markets: First, more U.S. homes have the option of buying broadband service from cable companies. Second, the U.S. is more spread out — the technical term is that those “loops” are longer.

But again, the facts in the UK suggest otherwise. Many homes in Britain’s largest city — London — have cable access, but cable prices have fallen alongside that of DSL service.

Meanwhile, the size of the U.S. may be a red herring. Most of the region between Boston and Washington is as densely populated as most of Europe and the UK. So is the California coast between San Francisco and San Diego. And so is the region of the Midwest centered on Chicago. Those areas are home to about a quarter of all Americans. In other words, we live in a big country, but a lot of it is relatively empty space.

The argument that the U.S. is too spread out is nonsense, according to Herman Wagter, one of the Netherlands’ most prominent evangelists for next-generation broadband. He thinks there’s something else going on in Verizon’s and AT&T’s opposition to competition at home: They’re afraid of it.

What I find really depressing about al of this is that it’s the same situation in Canada and even people in the US can feel the effects of no competition and high prices just by the horror stories of roaming charges on cellphone bills alone. I’ve personally seen 130kbps down, 60kbps up for over $70 Canadian be considered the norm in some places. By European standards in many cases, that’s probably considered bordeline farcical.

Government will does make sense both in the US and in Canada. In the US, there is no shortage of people who think that the Federal Communications Commission (FCC) is a sad joke when it comes to ensuring competition in the US. Meanwhile in Canada, there is growing calls to have the Canadian Radio-television and Telecommunications Commission (CRTC) disbanded for numerous reasons including favouring the big players in the market over smaller competitors and having former big telecom bosses be part of the board. While the Engadget article is long, it’s certainly well worth the read.

Drew Wilson on Twitter: @icecube85 and Google+.

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