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The Battle Is Raging for Control of the Internet -- and Big Corporations May Come Out on the Losing Side
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A battle is raging for control of the Internet and it is not taking place in Washington. Scores of cities, fed up with the recalcitrance and outright arrogance of their providers and Washington’s lack of action are taking their information future into their own hands by building their own high-speed networks. To Harold DePriest, head of Chattanooga’s municipally owned fiber network, currently the largest in the country, the issue is clear: “Does our community control our own fate or does someone else control it?”
He who owns the information highways makes the rules of the road. Today those rules are made by a handful of global corporations with little public oversight.
The 1996 Telecommunication Act was based on the almost religious belief that if we deregulated the Internet sector competition alone would improve services, drive down rates and generate even more competition. Just the opposite has happened. Competition is down. Rates are up. The combination of deregulation and monopoly has resulted in sky-high prices coupled with laughable slow speeds compared to those readily available to households and businesses in Europe and Asia.
Today states can require phone and cable companies to offer a low basic rate. The result is that in Minneapolis the cost of basic cable -- 20 channels including CNN and CSPAN -- is about $15 a month.
But Congress prohibited states from regulating Internet service providers even though broadband is increasingly essential even when applying for a job. So providers can charge $35-$45 a month for slow service and $100 a month for fast service, a practice that maximizes both their profits and the digital divide of people who cannot afford those prices.
Cable and DSL are fine if all you want to do is surf Web pages or receive some basic photographs. But we’re rapidly exiting the text and image era and moving into the high-definition video age. In the home, more and more devices share bandwidth from the single Internet connection. Multiple devices offer video chatting capability; DVRs and other home entertainment devices constantly download content from the Web; computers require massive operating system patches; video game systems feature games requiring a fast broadband connection.
Meanwhile, “cloud computing” applications now allow anyone to do their work online, and offer essential backup solutions, often ones that operate continuously.
All telecommunications will soon be delivered by broadband. The only infrastructure with the capacity to handle that vast flow of information is fiber-optic cables running all the way to the home. A single glass fiber can carry thousands of times the amount of information as a coaxial cable or a copper wire.
Incumbent broadband providers claim their copper can handle the load, but their networks are bogged down worse than metropolitan interstates at rush hour. That’s why cable and phone companies’ ads always contain two key words: “up to.” The Federal Communications Commission reports that Internet speeds often are only half as fast as the advertised maximum rate.
Incumbents have little incentive to lay new fiber. Their monopoly position allows them to continue to reap high profits while amortizing their investments in old technologies.
And when they do lay in fiber we are at their mercy. Karl Bode, a longtime reporter on broadband, notes that Verizon, which has laid the most fiber, has a very low tolerance for “towns or cities asking for much of anything in negotiations.” Verizon shunned Boston when it was asked to pay property taxes like everybody else. Wilmington, Delaware was rejected because it wanted to ensure the company would serve the entire community, not just wealthier neighborhoods. Pointedly, Verizon serves the affluent suburbs of Seattle, Portland and Baltimore, but not the inner cities.
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