U.S. Still Lags In Broadband Access
Lack of Competition Leaves U.S. 16th Among Industrialized Nations
By Martin H. Bosworth

September 17, 2006

The constant refrain of major telecommunications and cable companies is that there's "heavy competition" for the Internet user's dollar.

But "heavy competition" doesn't mean being able to choose only between Comcast and Verizon, and a newly published report reminds us that the United States still lags far behind the rest of the world in providing affordable broadband to its citizens.

"Broadband Reality Check II," an update to a report published last year by Consumers Union, the Consumer Federation of America, and media policy group Free Press, found that the United States continues to promote duopolies between major telecom and cable providers as real competition, that the level of Americans' access to the Internet can be severely restricted by income level and geographic area, and that the FCC uses misleading statistics to claim that competition is healthy for consumers.

"America appears to be a land of broadband haves and have-nots, where rural and low-income citizens are left behind in the information economy," the report stated. "This situation is the result of failed policy and a lack of imagination and vision from our policymakers."

Among the report's findings:

• The United States continues to rank 16th among industrialized nations for broadband development and penetration. Not only that, but broadband customers in countries such as Japan and South Korea enjoy broadband speeds that are hundreds of times faster, and can enjoy "bundled" television, phone, and Internet services for $25-$35 dollars, roughly the same price as a standalone U.S. broadband connection.

• The U.S. broadband market is "essentially a series of regional duopolies," with the top four cable and telephone companies -- Comcast, Verizon, AT&T, and Time Warner -- controlling over 83 percent of the entire broadband market, while buyouts and mergers of companies like AT&T and BellSouth serve to reduce actual competitive markets even more.

• The FCC continues to use ZIP codes that register one broadband provider as proof that broadband penetration is comprehensive across the U.S. But a recent report by the Government Accountability Office (GAO) found that the ZIP code method didn't account for the lack of more than one provider in any given region.

• The GAO also found that rural households and families with incomes of less than $30,000 were four times less likely to have broadband Internet access than urban households or those with incomes $75,000 and higher. A full third of American households are still stuck with dial-up as their only choice for Internet access.

The report comes at a time when telecommunications issues are very much on the minds of lawmakers. The massive update to the Telecommunications Act of 1996 had many provisions to address broadband access, most of which favored the duopoly system, and seemed ready to pass both the House and Senate.

But consumer groups and technology companies were angered over the lack of protection for "net neutrality," the right of any Internet user or content provider to access the Interent on an equal footing with others. They launched a massive grassroots campaign that drew media attention to the cozy state of affairs for the telcos and cable companies

Sen. Ted Stevens (R-Alaska), author of the Senate's version of the telecom bill, recently acknowledged that the bill was "all but dead" and would have to be partitioned into individual bills to have any chance of passing.

One portion of both the House and Senate bills addresses the concept of publicly-funded municipal wireless networks, or "Municipal Wi-Fi" for short. Although many cities and towns are developing their own wireless systems for free or low-cost use, heavy telecom lobbying has pushed 15 states to ban any sort of initiatives for Wi-Fi.

Telecom companies such as AT&T are determined to roll-out high-speed broadband networks and provide platforms for "TV over Internet" services such as MobiTV. The company favors tiered pricing models that will enable only the richest clients to pay for the best service.

Critics fear that without truly affordable broadband and equal access to content, the "digital divide" between rich and poor will continue to grow, and the middle-class users will be stuck in the "slow lane" of Internet access.

As the authors of the "Broadband Reality Check" put it, "Faith-based policy and wishful thinking will not bring broadband to rural areas, and the repeated use of misleading data will not help low-income consumers afford broadband."


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