Making U.S. Internet high speed

In 1996, @Home Network offered one of the first cable broadband services in the United States. It cost the equivalent of $52 a month for a maximum of 10 Mbps. Today, Time Warner offers customers in many locales 15 Mbps for about $55 a month. Not much improvement, and far, far below that offered for the same price and speed in many other developed countries.

At the same time, though, the wholesale cost of transporting data fell from $1200 per Mbps in 1996 to $1.57 today. That, according to an article in The New York Times, is why broadband service in the U.S. is not only supremely mediocre, but a rip off.

The article, “Yanking Broadband From the Slow Lane,” by Eduardo Porter, laments that there is no pressing motivation for America’s broadband providers to do any better or charge any less. And one of the major reasons for this impasse is “the oligopolies that run the nation’s high-speed Internet.”

Many, if not most, areas have one or two major providers – either a cable or a phone company (which may or may not offer fiber connections). And as Susan Crawford has pointed out, it's only where the phone company has invested fiber to the home or neighborhood (Verizon’s FiOS or AT&T’s U-Verse) that consumers have a choice for a high-speed Internet/video bundle. And the result is evident:

“That means that in most American neighborhoods, consumers are stuck with a broadband monopoly. And monopolies don’t strive to offer the best, cheapest service. Rather, they use speed as a tool to discriminate by price — coaxing consumers who are willing to pay for high-speed broadband into more costly and profitable tiers.”

But instead of competing, Verizon and Big Cable signed a cross marketing deal, with government approval.

Speed Matters wants to see the build-out of high-speed broadband, not cross marketing deals which eliminates competition driving investment and lower prices.

Yanking Broadband From the Slow Lane (NY Times, May 8, 2013)