Monopoly's price: We pay more for a slower Internet

[Mr. Big Dog 10,747]

Less regulation, eh? It often comes at a high price. But that's exactly what the corpotocracy in America wants - high prices. And Americans largely support this nonsense that delivers less at a higher cost. Just like the health care system. Only in America! SMH

Monopoly's price: We pay more for a slower Internet

America's slow and expensive Internet is more than just an annoyance for people trying to watch Happy Gilmore on Netflix. Largely a consequence of monopoly providers, the sluggish service could have long-term economic consequences for American competitiveness.

Downloading a high-definition movie takes about seven seconds in Seoul, Hong Kong, Tokyo, Zurich, Bucharest and Paris, and people pay as little as $30 a month for that connection. In Los Angeles, New York and Washington, downloading the same movie takes 1.4 minutes for people with the fastest Internet available, and they pay $300 a month for the privilege, according to The Cost of Connectivity, a report by the New America Foundation's Open Technology Institute.

The report compares Internet access in big American cities with access in Europe and Asia. Some surprising smaller American cities — Chattanooga, Tenn.; Kansas City (in both Kansas and Missouri); Lafayette, La.; and Bristol, Va. — tied for speed with the biggest cities abroad. In each, the high-speed Internet provider is not one of the big cable or phone companies that provide Internet to most of the United States, but a city-run network or start-up service.

The reason the United States lags many countries in both speed and affordability, according to people who study the issue, has nothing to do with technology. Instead, it is an economic policy problem — the lack of competition in the broadband industry.

"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."

For relatively high-speed Internet at 25 megabits per second, 75 percent of homes have one option at most, according to the Federal Communications Commission — usually Comcast, Time Warner, AT&T or Verizon. It matters not just for entertainment; an Internet connection is necessary for people to find and perform jobs, and to do new things in areas like medicine and education.

"Stop and let that sink in: Three-quarters of American homes have no competitive choice for the essential infrastructure for 21st-century economics and democracy," Tom Wheeler, chairman of the FCC, said in a speech last month.

The situation arose from this conundrum: Left alone, will companies compete, or is regulation necessary?

In many parts of Europe, governments try to foster competition by requiring that the companies that own the pipes carrying broadband to people's homes lease space in their pipes to rival companies. 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.

When New America ranked cities by the average speed of broadband plans priced between $35 and $50 a month, the top three cities, Seoul, Hong Kong and Paris, offered speeds 10 times faster than the U.S. cities. (In some places, like Seoul, the government subsidizes Internet access to keep prices low.)

The divide is not just with the fastest plans. At nearly every speed, Internet access costs more in the United States than in Europe, according to the report. American Internet users are also much more likely than those in other countries to pay an additional fee, about $100 a year in many cities, to rent a modem that costs less than $100 in a store.

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.

In each case, the networks are fiber-optic, which transfer data exponentially faster than cable networks. The problem is that installing fiber networks requires a huge investment of money and work, digging up streets and sidewalks, building a new network and competing with the incumbents. (That explains why super-rich Google has been one of the few private companies to do it.)

The big Internet providers have little reason to upgrade their entire networks to fiber because there has so far been little pressure from competitors or regulators to do so, said Susan Crawford, a visiting professor at Harvard Law School and author of Captive Audience: Telecom Monopolies in the New Gilded Age.

[Girl from Celebes 588]

They increased our internet bill in the last two months. "They" I mean "AT&T.

[Mr. Big Dog 10,747]

They increased our internet bill in the last two months. "They" I mean "AT&T.

Same here and there's no alternative to the service provider I have. It's a sh!tty deal. All thanks to an unregulated market.

[Girl from Celebes 588]

Same here and there's no alternative to the service provider I have. It's a sh!tty deal. All thanks to an unregulated market.

I can't believe that super-power country like USA let the citizens have to suffer like this. High prices and slow connection. I am not counting when my husband was stationed in Guam. He was being cheated by the local company.

[DavenRoxy 1,073]

I agree that we pay too much due to little competition. But I don't think the article is 100% accurate...

Downloading a high-definition movie takes about seven seconds in Seoul

Having lived there for four years, I know this not to be true. Downloading a HD movie would take more like 15-30 minutes in Seoul, whereas it would take hours in the USA. Perhaps they mean beginning a HD stream? Not sure. But I also had SUSTAINED download speeds of 1Gb and just over on a regular basis. Was paying around $35 a month IIRC.

In Alaska, you had three choices: Satellite (YUCK), the local cable company (limited downloads), and the local phone company (ADSL). Cable was around $80 per month for about 20/2 Mbps, but you also had a 15Gb monthly limit (they had tiered plans). ADSL only got you 3/1 Mbps, but it was about $65 a month IIRC. No other plan options. Truly sucked for choices!

[Rattlehead 69]

I can't believe that super-power country like USA let the citizens have to suffer like this. High prices and slow connection. I am not counting when my husband was stationed in Guam. He was being cheated by the local company.

You're living pretty well when your definition of "suffering" is paying too much for high speed internet...

[Girl from Celebes 588]

You're living pretty well when your definition of "suffering" is paying too much for high speed internet...

The internet in the US is slower compared to Singapore -at least in Key West-. Only rich people don't care how much money they will spend for...nothing.

[The Nature Boy 4,224]

Less regulation, eh? It often comes at a high price. But that's exactly what the corpotocracy in America wants - high prices. And Americans largely support this nonsense that delivers less at a higher cost. Just like the health care system. Only in America! SMH

The problem is the people that live in a liberal Utopia like New York. San Fran and DC I pay about 59.00 bucks a month and enjoy dowloads of 30 Mpbs on avg and around 8 up. I could pay a little more and get as much as 100 down. The rest of those backward countries need to catch up.

[Mr. Big Dog 10,747]

The problem is the people that live in a liberal Utopia like New York. San Fran and DC I pay about 59.00 bucks a month and enjoy dowloads of 30 Mpbs on avg and around 8 up. I could pay a little more and get as much as 100 down. The rest of those backward countries need to catch up.

Yes, deny the reality of the US lagging behind because we decided to write a black check to the providers and allow them to monopolize the markets. Don't admit that regulations that ensure competition lead to better service at lower prices. The reality of lack of choice and competition in broadband internet service and the high prices for slow service hit most Americans.

[The Nature Boy 4,224]

Yes, deny the reality of the US lagging behind because we decided to write a black check to the providers and allow them to monopolize the markets. Don't admit that regulations that ensure competition lead to better service at lower prices. The reality of lack of choice and competition in broadband internet service and the high prices for slow service hit most Americans.

The one and only thing I am saying is that my interet is cheaper and faster than many of the countries listed, I know you would choke before you could admit anything in teh US may be OK

[Póg mo 1,749]

It's pretty bad here. The way Comcast lures people in with low prices for the first couple of months and jacks them up later really bothers me. Anywhere else, you get rewarded for being loyal customer, here you get screwed.

Edited November 4, 2014 by InKorea

[belinda63 3,038]

Time warner is charging $54 per month for 15gb download. They reset the service daily at 9 am. I have to reset my router daily to get the full speed. And they charge me $4.95 per month for wifi capabilities even though I own my own cable modem and router. They are charging me to broadcast the signal I already paid for to my TV.

[spookyturtle 9,466]

Probably Obama's fault.

[The Nature Boy 4,224]

Probably Obama's fault.

That works for me

[Mr. Big Dog 10,747]

The one and only thing I am saying is that my interet is cheaper and faster than many of the countries listed, I know you would choke before you could admit anything in teh US may be OK

Not really, I'd like to have choice and competition in the market. Unfortunately, I don't. You seem to be lucky having good options available where you live. Most Americans do not.