In the United States, the Federal Communications Commission in 2002 reclassified high-speed Internet access as an information service, which is unregulated, rather than as telecommunications, which is regulated. Its hope was that Internet providers would compete with one another to provide the best networks. That didn’t happen. The result has been that they have mostly stayed out of one another’s markets. Yet it is telling that in the cities with the fastest Internet in the United States, according to New America, the incumbent companies are not providing the service. In Kansas City, it comes from Google. In Chattanooga, Lafayette and Bristol, it comes through publicly owned networks. “It’s just very simple economics,” said Tim Wu, a professor at Columbia Law School who studies antitrust and communications and was an adviser to the Federal Trade Commission. “The average market has one or two serious Internet providers, and they set their prices at monopoly or duopoly pricing.” If you look at this issue, it appears that our regulatory policies in the US have resulted in quasi-monopolies that are so ineffective in delivering good service and low prices that they are bested by government options (municipal in some parts of the US). I am not denying that the private sector *can* provide good products and services (it does so regularly). But if we allow minimal or no competition, while leaving the profit motive in the equation, we will have higher prices and bad services/products. . .
Posted on: Fri, 31 Oct 2014 07:09:58 +0000
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