RSSStudy: Cable/telco competition brings North America slowest, costliest broadband
By Tim Conneally | Published October 16, 2009, 7:15 PM
Today was the Federal Communications Commission's deadline for public comment on the Berkman Center For Internet and Society's recent study, which examines the growth of broadband Internet access in other countries, along with the factors that have made those markets overseas more competitive than in the US.
"International comparisons...have been a political hot button in the past few years. Because the United States began the first decade of this century with the fourth-highest levels of broadband penetration among OECD nations, and is closing the decade in 15th place in these same rankings, and because, according to International Telecommunications Union measures, the United States slipped from 11th to 17th between 2002 and 2007, many have used these data to argue that the United States, on its present policy trajectory, is in decline," the study says.
"Others have responded by criticizing the quality of the data in various ways, asserting that the United States broadband market is performing well and there is no concern to be addressed," it continues. "The debate occasionally resembles that of a horse race; indeed, a horse race in which those who have already placed their bets are arguing about how to decide which horse has won."
To whom should the US look for inspiration? BCIS suggests Japan, South Korea, Sweden, and the Netherlands. Also, Germany and Portugal are especially noteworthy because of their high actual speeds compared to those advertised, despite the fact that "neither country has any fiber deployment to speak of."
But the common thread among all the countries BCIS studied was that "open access" policies such as unbundling, bitstream access, collocation requirements, wholesaling, and other functional separation have been important to every high performing country...and the United States essentially abandoned these policies in 2001 and 2002. "Open access has been largely treaded as a closed issue in US Policy debates ever since," the study said.
The study finds that the emphasis other countries have put on open access is backed up by empirical evidence.
"We find that in countries where an engaged regulator enforced open access obligations, competitors that entered using these open access facilities provided an important catalyst for the development of robust competition which, in most cases contributed to strong broadband performance across a range of metrics."
The lowest prices and highest speeds are almost all offered by companies participating in a market with telephone, cable, and competitors who built their presence through open access facilities.
The highest priced and slowest services are "overwhelmingly offered by firms in the United States and Canada...markets structured around competition between one incumbent owning a telephone system, and one incumbent owning a cable system."
All I know is I pay a lot of money for 22Mbs via my cable company. Rarely do I see 22Mbs, or even 10 and lucky if I see 5. Before that I had dsl at 6Mbs and you know what? it was 6 Mbs and it cost a lot less. It's not a dsl vs cable argument, I just detest the "up to" advertising. Would you buy a car that is advertised to go "up to" 65 mph **(65 mph not guaranteed, speeds of 15-20 mph are common)..lol.
What is funny is when I call and complain and threaten to get another provider my speeds suddenly get better again. I have to do this about every month.
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|In any top 25 metro area in the country you can get fiber installed, and have pretty much the fastest internet possible.
In nearly every small town through large town with a library, free internet access is available, in most states.
In those same towns, 3g wireless is available, giving those with accounts internet access. No other country of this size has said services available.
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|LOL. Spoke like a true American. Of course no other country in the world has any type of internet services. Just like they don't have running water or sewer systems, public education, or free health care.
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|fatty, what do you pay for internet service at what sort of bandwidth? I'll bet you pay more than most americans for the same.
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|I live in Manhattan. The highest density of people in the the U.S. You say there is fiber? Please tell me how and who is offering it in my zipcode. And I live practically next door to the time warner center.
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|Verizon is has/is putting FIOS in alot of complexes in Manhatan. Or try SpeedUS.com as well.
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|Really. Maybe you could check what is the fastest DSL service for zipcode 10019 then? Cuz for me the max speed I can get is 3mbit. Not until 2015 at the earliest will most of manhattan be covered with fios.
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|I live in Clevland, can't get fiber here.
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|Think about one thing people. 10 years ago the US had some of the best internet connections in the world. Right now it doesn't. It is as simple as that. Despite that it is probably the top internet based services provider in the world. Or at least US based companies are the top providers. But the market shows that you tend to deploy your services where it is cheaper. If the US continues to go on this route services will start to migrate to other nations.
We may or may not agree with the policies being taken, but what I stated above is happening right now.
Second point. Some think that having some kind of market regulation turns a nation into socialism. Wrong. Any nation that runs on a HEALTHY capitalist system requires some measure of regulation or else in certain markets a single company will take control and destroy all competitors becoming a monopoly and having the muscle to deny access of any other company in that market. Another example. Imagine that the food industry didn't have regulations imposed by government institutions to follow. What would happen is that in order to get a higher profit, the industry would start selling people rotten potatoes. What were talking over here is the ability of certain companies in the industry to monopolize their market in such a way that the market freezes. Were talking about how the Internet hasn't evolved that much in the US. But the thing is this topic is directly connected with the Net Neutrality debate. It is once more proof that Teleco companies aren't helping the US to progress. And the all debate regarding Net neutrality is one more proof of that. This companies need to become accountable for their actions.
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|Many technologies are "leap-frog" type, one of them in internet connectivity. The USA is probably the only country in the world in its physical size, that has a copper-line connection *and* electricity to even the most remote locations in the country. These things cost a huge amount of money to give out at A LOSS (no population density bringing profits up).
So it'll take awhile to deploy new internet/data technologies everywhere in the USA, with the rural areas always screwing up "the average" because they'll always remain a few steps behind the big cities (they don't NEED fastest connections to be happy and stay informed/entertained so the US will NEVER sponsor fastest connections for them -- only more basic techs).
This study would be more interesting to me if it was made on the (fastest) top 20% of home internet users in the countries studied, meaning the metropolitans. The remaining 80% wanna live a "quiet, better lifestyle" so they gotta give up on INTERNET SPEED, for one. Such study would probably demonstrate the USA is still in the top 5 in everything from internet speed to wireless/cell speeds, and clearly in the top 5 for COST as a fraction of THAT citizen's income...
And the frog-leaping will happen within a few years when fiber to the house will be much more common, and the actual speed to the net will be REAL SPEED TO A PLETHORA OF ACTUAL HIGH BANDWIDTH CONTENT, unlike what this study probably shows, the speed to your ISP's router to mostly check your email at that rate hehehehe
America #1!!
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|Let me see;
The poles belong to the electric company.
The property belongs to the property owner.
The right of way is to the city, village, county.
The franchise for supplying electricity, cable, phone
... is issued by the municipality.
But, no municipality will say "You violated the franchise agreement!
In 30 days - Rent on our 'right of way' will be $6.00
( year 2000 US dollars adjusted for inflation ), per 10 linear feet, per month.
'Move it or sell it!'.
Most municipalities opt to;
Let's discuss this weekly at a nice invitation only,
fully catered, hotel seminar for the next 10 years.
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|Huh? Are you yet another complainer with no VIABLE solution? Taxes are mandatory for existence. While there are a few things I'd like to see in the USA happening, one of them is increased taxes on the rich (in all forms -- including taxing money sitting in the bank, in properties, in the stock market, with least taxation on CREATING JOBS AND FACTORIES AND HOUSES), the other is "open access" which obviously will be good for everyone.....I still am quite happy with current affairs. Being the most tech advanced per capita nations isn't necessarily the ultimate goal..Japan has one of the highest suicide rates in the world... More free quality time and doing meaningful things is actually the ultimate goal of an intelligent human being...
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|It's the same old story. Greed. The companies want every drop of profit they can get for the absolute lowest cost to them. They run too many customers on too little bandwidth. We all know how common it is to have your connection slow to a crawl or even fail due to this problem. I pay extra for guaranteed speed and still I get slowdowns too often. Every time you ask that the problem to be looked into, it gets buried behind the phrases "free enterprise" and "we can't stay in business without a profit". Greed is still the American (corporate) way.
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|Well said, Bil!
-Revolution
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|Not well said...
Companies dont operate for altruistic reasons... Im really sick and tired of people attacking capitalism which has brought us the greatest standard of living in the world. If you want marxism, move to Venezuela or N. Korea.
Im as frustrated as the next person but attacking the very foundation of our economic system because your fugging internet connection is slow is weak minded and ideologically retarded.
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|The nice thing about the capitalistic system is, if you work a bit harder/smarter, and make more money, there WILL BE A SOLUTION FOR YOUR PROBLEM. Slow internet? Get DSL *and* cable. Still slow? Get a T3 or move to a bigger city -- it's always ONLY a matter of cash.
I also don't like complainers. World borders are open (to anyone who's worth anything). Anyone whose internet is "sooo slow" that it ruins his life can go find another country to live in and let's see how you like the "overall" quality of life there...
The United States is the greatest country in the world. Period.
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|Capitalism and "complaining" have nothing to do with honesty and integrity. I live in a large city and I pay for 20 MB service, but I don't often get it. I agree the US is the best country. Only a fool says if you don't like your cable service you should move to another city or even another country. Openly commenting on the failure of these companies to fulfill contracts is a way to bring it to light and possibly get regulations to force them to do so. People like you encourage them to decieve the public and steal by charging excessive fees for inferior service. You are not part of the cure, you are part of the problem.
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|Isn't it funny how Socialistic nations have better internet than Capitalistic nations.... Mine is ranked one of the fastest in NA.
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|That's because they take a large amount of you and everyone elses money. If I dont want internet, then I shouldnt have to be coerced into paying for it. Lets try not to be Maoists, k?
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|@smith288, so you are against public education, public police, public fire, etc...? Pay as you go, right? Me, me, me, me...how can you be so self centered?
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|Things that have to happen will eventually happen. Open access is one of them. The question is when, not if.
P.S.
fatty -- next world war we'll see who had more nails on their "coffin". Or...: the US will burst out of that coffin like a dormant Mac zombie and bite EVERYONE'S HEAD OFF. Be scared. We will win. You will all lose. Bad. (As always...) And don't worry, nobody will remain neutral in WW3. We'll even go to Canada and say "oh really? you want us to protect you from the terrorist outside and inside you?? We've been paying 55% of our GNP for militarizing while you've had fun spending cash on 'social programs'... GIVE US THAT OIL RIGHT NOW." You know it's gonna happen... ;) What country in Europe are you from, fatty? Started taking Arabic lessons yet? hehehehehehehe
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|This is simply another nail in the coffin of the USA. Totally corrupt political system with a totally stupid populace means the USA will continue to have horrible monopoly/duopoly based broadband
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|Yeah, we are behind. Part of the reason is that companies like Dynus will offer a city fiber and then start the project and steal millions of dollars and never finish the job. This is happening all over, and it is killing our internet. This is from the county that I grew up in. http://www.journal-news....l?cxtype=rss_local-news
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|Agreed, also a problem is that telcos (at least in Florida) cannot provide naked DSl (no phone number or dial tone) by (thanks to our wonderful system of laws). So therefore distance is i believe limited. Technology is so crippled by profit making regulatory crap, however the other side of the coin is no regulation and then we would surely get bent over by the major players. It would be nice to have choices that were not tied to long term contracts. I would switch providers every other month if I had the chance and no contracts existed, till I got the price down to a reasonable rate. Then I would stay with the faster provider. I'm not asking for free service, but HSIA and phone for a buck a day sounds reasonable, tax title and delivery included. 30.00/ month. One can dream can't they?
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|Internet speeds in Florida are a big joke.
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|I am not allowed to get WOW, AT&T or Time Warner cable/internet....only insight or a dish. Something has to be done with the limit on competition.
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|That's because the U.S sort of resembles 3rd world nations when it comes to competition in the cable and telephone markets. You can't get Verizon and ATT in the same market, therefore whoever the dominant carrier (aka, ONLY carrier) in that market is, they can charge an arm and leg for phone and dsl service. For example, in South Florida where Bellsouth was dominant (now ATT) I decided to get service with a company called Supra Telecom which was much cheaper. I thought everything was great until I tried to get DSL. Supra was blocked by bellsouth from offering dsl themselves, they had to go through bellsouth and as such, had to add $20 a month for dsl on top of whatever package you needed. Luckily I went with another dsl provider completely which was slightly more expensive than actual bellsouth offerings but came out to be much cheaper while paired with Supras cheaper service.
Anyway, back to the point....I, to this day don't understand how these companies are allowed to operate like this. Why can't Cox operate in a Comcast area and vice versa? Why can't AT&T operate in a Verizon area? How was this allowed to happen?
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|I have no love for the Telcos.
But, to answer your questions, who is going to provide the infrastructure to these competitors? Not just the wire, which all has to come to a central point to crossconnect. The right-of-way, cities charge for each pole among other things. Maintenance, the cables aren't forever, need expanded, spliced, etc.
So, why can't Cox offer service in a city where Comcast operates? Because someone has to build the outside plant. And that someone expects to get a return on their investment over a period of years.
You know, part of the reason we have lousy service is because the US made bets (investments) on technology early on. Other countries waited and installed better tech. The US operators are not going to scrap their investment ahead of time.
China on the other hand, started very recently and has excellent equipment. They also have regulated service. I can get 10M service for 120 RMB monthly, about $20.00
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|For the most part, can't they open it up more? Cox can 'rent' their area facilities to comcast and vice versa? I understand the principle of why they're not in each others areas but I'm sure that given an option, all each company would need is access to the infrastructure ie: actual cables running around the place. Are you telling me that these are owned by these private companies?
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|It was probably something ATT did too screw us all, they are evil after all. I wish FIOS could come to certain parts of Florida.
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|Yes the cable infrastructure is owned by private companies. Anyone can string cable on poles if they're willing to pay the previously mentioned right of way fees necessary to put their cables on the poles but generally speaking in any one area all the wiring is owned by one player. Therefore it's not in their best interest to rest their facilities to competitors. Why let them take your customers and pay you less than you could get if that customer was yours directly when you can have a virtual monopoly in a particular area.
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|Even though fiber has been run right through the town, Verizon will not bring internet to my small town. There's no cable company to speak of in my area. There are 3 cell towers within a half mile of my house and 3G coverage about 5 miles away. Still, no company will bring internet to my town. So my options were: Satellilte, Dialup, or a local guy who got fed up with not having anything and created his own wireless broadband.
So who builds the infrastructure and who maintains it all? Well, currently my town has started to build their own network. It's happening all over the nation. It's pretty much the only way the other 70% of the US population will ever get broadband access.
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|Wow...logical post. After reading mountainous posts about "greed" and how rotten capitalism is, it's really about how the USA is suffering from their own success and cant play catchup because of the tremendous amount of investment private enterprise has put into it.
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|@smith288, so what you are saying is it is not feasible for private enterprise? yeah. those hundreds of millions in profit AT&T, Comcast, Verizon, etc... are making yearly clearly shows they can not afford it. I agree with you, internet service is a big undertaking and the states should setup non-profits to provide the last mile and lease it to anyone wanting to provide ISP service.
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