The US Federal Communications Commission (FCC) raised tough questions this week about the state of American broadband in its eighth annual "Broadband Progress Report."
Here are the key stats:
- 26 million Americans nationwide have no broadband at home.
- 14.5 out of 19 million Americans in rural America (roughly three quarters) have no broadband at all.
- The leading causes of lack of broadband include price.
In a prepared statement, FCC Chairman Julius Genachowski remarked:
The US has now regained global leadership in key areas of the broadband economy, including mobile, where we lead in mobile apps and 4G deployment. But in this flat, competitive global economy, we need to keep driving toward faster broadband and universal access.
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To be fair, the FCC is making some moves to fix the problem of ongoing broadband scarcity. Aside from a handful of dissenters, the agency has enjoyed broad bipartisan support for its efforts to repurpose and redistribute chunks of spectrum, allowing new opportunities for wireless broadband. And it repositioned the Telecommunication Act's $4.5 billion rural telephone expansion fund to apply to broadband. Fiscal conservatives may cringe at that spending, but they'd be hard pressed to argue that the FCC isn't better off applying those Congressionally authorized funds to broadband than to the dying landline.
Still, the FCC report raises serious questions of why US broadband is stalled. I would argue one key factor is high broadband prices. And a major culprit in my view is the battle to kill municipal broadband.
Resistance to municipal broadband comes from fiscal conservatives who object to local governments offering broadband services in competition with private-sector corporations.
For example, while Chatanooga, Tenn., enjoys seldom-seen gigabit connection speeds, nearby South Carolina is stuck in the slow lane. The situation is poised to improve little. In June, a lobbyist supported by AT&T helped get a bill passed, making it nearly impossible for municipalities to create community broadband offerings.
I consider myself a fiscal conservative, but there's a mountainous difference between fighting big out-of-touch federal spending and fighting a community's right to vote to band together and deploy a local Internet service. Fighting the former is conservative in a traditional sense; fighting the latter is anti-democracy. But that distinction was lost on South Carolina's Republican-controlled legislature, perhaps responding to pressure from AT&T.
In rural markets, the only solution to broadband scarcity, in my view, is to provide local government incentives to offer services, perhaps as part of broadband research projects. In other countries, such as global broadband speed leader South Korea, subsidies for high-speed connections for low-income and rural citizens have been successful. It makes sense that telecoms wouldn't want to provide service to regions that would have few people and would cost huge up-front costs to cover. So it's the perfect opportunity for helpful government involvement.
But the bigger head-scratcher is why service is still sub-gigabit in America's heavily populated regions. The culprit here is that broadband providers in many regions -- even affluent, well-populated ones -- enjoy monopolies or duopolies, the latter of which is marked by a seemingly collusive pricing scheme. The result is that there is no competition to drive down prices or drive up data speeds, so ISPs like Comcast and Time Warner can charge high fees for slow connections.
The US is not the only country to experience this. While the US market has its own unique nuances, big telecommunications players are found in nearly every global market. But the 11 countries that are ahead of the US in broadband speeds -- mostly in Europe and Asia -- have nearly all benefited from increased local competition from municipal providers.
To fix broadband, Congress and state governments must work together to create local subsidies for rural development. At the same time, voters must adopt a hard-line stance toward representatives who look to silence their voice, such as the legislators in South Carolina. When a company like AT&T is supporting efforts to prevent competition, that's a textbook perversion of capitalism and the "free market."
In short, the blame for poor broadband -- and the solution -- lies in part with the government, in part with the service providers, and in part with the US voters.
— Jason Mick is senior news editor at the independent tech news site DailyTech.