The Federal Communications Commission says its much anticipated national broadband plan, which will be unveiled Tuesday, will help make Internet access faster, cheaper and more pervasive.
To help deliver on that promise, FCC officials commissioned a study from Yochai Benkler at Harvard's Berkman Center for Internet and Society. They wanted to know more about how people in other countries connect to the Internet. Benkler says broadband in other developed countries is generally faster and cheaper than it is in the U.S.
"You're looking at prices in the leading countries that are a third or a fifth of the prices that we're paying — and they're getting better speeds for it. So the differences are not subtle based on what we found," Benkler says.
When it comes to speed and price of Internet connections, Benkler found that American cities trail far behind their counterparts in South Korea, Sweden — even eastern Slovakia. The big reason, Benkler says, is competition. You need lots of different companies competing for your Internet business, hustling to provide better service at a lower cost than their rivals. The way other countries do this is by essentially forcing the big companies to share their wires with the smaller ones. Benkler admits that won't be an easy sell in the U.S.
"There will be enormous political resistance. But at the same time, the FCC has to get the next generation market structure right. This is the moment to do it," Benkler asserts. "Either you are willing to take the step to get to more competition, or you are engaged in cosmetics."
Thanks, But No Thanks
The FCC got Benkler's report and basically said, "Thanks, but no thanks." Blair Levin, executive director of the FCC's broadband initiative, says forcing companies to open their circuits to competitors — what's called "open access" — just won't work in the U.S.
"Other countries tend to have broadband dominated by a single telecom carrier: the phone company. The U.S. is very different. The majority of broadband subscribers [there] actually subscribe through cable. So it's not always an apples-to-apples comparison," Levin says.
There's a bigger problem: money. Levin was also at the FCC in the 1990s, when the commission tried to impose open access on the U.S. telephone industry. The phone companies fought tooth and nail, and eventually won. Private investors have not forgotten that fight, says Paul Gallant, an analyst at Concept Capital. Gallant says any startup looking to compete with the big boys will have a tough time finding investors.
"You'd have to have a stomach for a fair amount of risk. And you'd have to have some pretty good lawyers on your staff who could tell you that, in the end, you're going to survive the judicial gauntlet that you know the cable and phone companies are going to throw at you," Gallant says.
It's unlikely the FCC or Congress would want to pick that kind of fight in an election year, says Ben Scott, policy director at the Washington, D.C., nonprofit Free Press.
"Even if it's the right answer to the question — which the academics at Harvard have told us it is — the ways of Washington are such that tangling with the combined might of the industry on that question, I think, is not one they're going to take on," Scott says.
The Answer May Be Wireless
The FCC's Levin says there's another way to get faster, cheaper broadband to U.S. consumers. He suggests taking back some of the airwaves that TV broadcasters aren't using for wireless Internet connections.
"If we want broadband to be available everywhere, wireless has got to be part of it," Levin says. "We don't know necessarily whether wireless is going to provide perfect competition to wired. But we do know it's a very important piece of the puzzle."
In a few years, Levin says, the next generation of wireless companies may be able to compete with the big phone and cable companies that dominate Internet service today. Right now, the big players don't seem to be worried. In fact, they seem to like what they know about the FCC plan to be announced in full Tuesday. That's exactly what worries Ben Scott at Free Press.
"If the incumbents who have caused the problem that we have a plan to solve in the first place are cheering that the plan is good for them, I think we have to question whether it's real reform, and whether it's going to get the job done," Scott says.
If it doesn't get the job done, the FCC may find itself looking to eastern Slovakia for better answers.
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