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Bill Moyers: Why U.S. Internet Access is Slow, Costly and Unfair

Americans are getting bilked for second class internet access.

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BILL MOYERS: Why is there such a disparity there?

SUSAN CRAWFORD: The difference in all of these areas is competition and government policy. It's not magical. Without the intervention of the government there's no reason for these guys to charge us anything reasonable or to make sure that everybody has services.

BILL MOYERS: How do you explain that in the course of one generation, from the invention of the internet in this country to falling way behind as you say the rest of the world in our access to internet? How did that happen?

SUSAN CRAWFORD: Beginning in the early 2000’s we believed that the magic of the market would provide internet access to all Americans. That the cable guys would compete with the phone guys who would compete with wireless and that somehow all of this ferment would make sure that we kept up with the rest of the world. Those assumptions turned out not to be true. It's much cheaper to upgrade a cable connection than it is to dig up a copper phone line and replace it with fiber. So the cable guys who had these franchises in many, most American cities, they are in place with a status quo network that 94 percent of new subscriptions are going to. Everybody's signing up with their local cable incumbent. There is not competition for 80 percent of Americans. They don't have a choice for a truly high speed connection. It's just the local cable guy. Competition has just vanished.

BILL MOYERS: Well, the 1996 Telecommunications Act was supposed to promote competition and therefore protect the consumer by bringing prices down. That didn't happen?

SUSAN CRAWFORD: That didn't happen because it's so much cheaper to upgrade the cable line than it is to dig up the copper and replace it with fiber. The competition evaporated because Wall Street said to the phone companies, "Don't do this, don't be in this business." So you may think of Verizon and AT&T as wired phone companies, they're not. They've gone into an entirely separate market which is wireless.

They're the monsters on the wireless side that control two thirds of that market. So there's been a division. Cable takes wired, Verizon/AT&T take wireless. They're actually cooperating. There's a federally blessed non-compete in the form of a joint marketing agreement between Comcast and Verizon. And so the world is perfect for them, not so great for consumers who are paying more than other people in the rest of the world for slower service.

BILL MOYERS: Since the 1996 Telecommunications Act which I thought was going to lower the price of our monthly cable bill, it's almost doubled.

SUSAN CRAWFORD: Well, that's because Time Warner controls Manhattan. There's no competition. The cable guys, long ago, something they call “the summer of love,” divided up—

BILL MOYERS: “The summer of love?”

SUSAN CRAWFORD: Yeah. They clustered their operations. It makes sense from their standpoint. “You take San Francisco, I'll take Sacramento. You take Chicago, I'll take Boston.” And so Comcast and Time Warner are these giants that never enter each other's territories.

BILL MOYERS: You talk to certain people and they say, "Look, I don't know what this is about. I have all the gizmos I want. I have a smart phone, I have a tablet,” And they say, "What's the crisis? Because I have more access than I can use."

SUSAN CRAWFORD: There are a lot of bright shiny objects that are confusing people about the underlying market dynamics here. What people don't realize is that for this wireless access you're paying too much and the coverage is too spotty. On the wired side, that's where we're really being left behind. And here's the important tie to understand. A wireless connection is just the last 50 feet of a wire. So fiber policy is really wireless policy. These two things fit together. And if the whole country did an upgrade to cheap fiber everywhere we'd get better connection for everybody. Right now though if a mayor wants to do this for himself he'll be pummeled by the incumbents. In almost 20 states in America it's either illegal or very difficult for municipalities to make this decision for themselves.

 
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