I recently stumbled across a great infographic from Zing Broadband that got me thinking about a topic that I believe we should all begin to seriously consider: Should Internet access be treated as a public utility?
Imagine a world where the Internet is a public utility, one provided affordably and universally to all. This is the reality in much of Europe and Asia. In fact, in South Korea, 94 percent of people have high-speed Internet, the infographic shows. Unfortunately, in the United States -- the country where the Internet originated -- only 70 percent of people actually have high-speed Internet. And speeds here are much lower: Indeed, South Korea touts speeds 200 times faster than we have, Zing says. All those advantages come for $8 less on average per month than what Americans pay for slower service, according to the graphic.
The government’s role
Today's Internet compares to when telephone was becoming the norm in America. Then, rural residents lagged in phone adoption, much as they do today with Internet access. Despite plans like the US Department of Agriculture's Community Connect Program, the US government has not prioritized bringing technology to rural areas, so that no matter where we live, we can enjoy access to the Internet the way those in urban areas do. A disappointing one-third, or 100 million people in the US, do not have broadband Internet access.
Despite the fact that communication is increasingly done by Internet rather than telephone, the American government has still not provided solutions to make the service universally affordable. For low-income citizens of this country, the Internet is often considered a luxury, when really it should be a utility. In Manhattan, the largest city in the country, 2.2 million people cannot afford access.
Dominated markets are holding us back
With a select few companies dominating the broadband market, all the money that Americans pay for less-than-stellar service is going to the wrong place. Verizon owns 34 percent of the US wireless market, while AT&T has 32 percent of that market. Provider Comcast rakes in a tidy 95 percent profit margin on the broadband service it offers.
These companies hand over hefty paychecks to their CEOs, more than 500 to 1,000 times that of the average employee at their companies. For example:
- Verizon CEO Ivan Seidenberg makes $26 million
- AT&T CEO Randall Stephenson makes $22 million
- Comcast CEO Brian Roberts earns $27 million
- Time Warner CEO Glenn Britt earns $16.4 million
A sizable portion of the hefty fees we pay goes towards those big salaries, while more goes towards government lobbying. Verizon, AT&T, and the National Cable and Telecommunications industry trade group spent half a billion dollars in this area. With no fewer than 49 Congress members being AT&T stockholders, it is logical to presume that they would not support efforts to make Internet a public utility, as it will directly affect their net worth. What’s more, many of those who have been on the Federal Communications Commission and helped make favorable decisions for Internet providers have since joined the payroll of the companies they assisted.
Should these companies feel a responsibility to the public to make service available to more and to foster a more competitive market? It seems that while these companies have done a great job at maximizing their profitability in the in-demand broadband Internet market, there has been less responsibility to public need.
Let's look at electrical service. In the 1880s, private electrical companies were pretty much the only option available. As a result, big cities and the rich received service that was highly overpriced, while almost everyone else was left underserved or not at all. By the middle of the 1920s, 15 companies held a stranglehold on the market with about 85 percent control of the nation's electricity distribution.
Communities began to form their own electrical utilities and regulation was then applied to the market. While many agree this step created a fairer market that benefited the greater public good and made sense for electricity, that thinking has not spread to our most vital form of communication today -- the Internet. Do these companies not have a responsibility to the public good to continue to invest in such a vital public good to keep up with the pace of need in the US?
The future of the American Internet
Even the quality of the Internet that we enjoy in the United States pales in comparison to other places. By 2016, we are expected to use 52 gigabytes of data monthly, and the two biggest wireless providers, Verizon and AT&T, do not offer unlimited data caps. South Korea is far ahead of us with Internet speed connections of 15.7Mbit/s on average, while we lag at 6.7Mbit/s. We need better.
More than two years ago, Finland made Internet access a legal right of its citizens. When is the US going to do the same? Where once we led, we are now falling far behind.
— Gerad Hoyt is the Online Marketing Director for Vast Bridges, a company specializing in channel marketing, sales and promotion. You can follow him on Twitter @geradhoyt.