Wednesday, June 29, 2011

The (sad) state of broadband in the US

Engadget has an excellent article on why the state of US broadband is poor compared to other developed contries.  The video along with the article is definitely worth watching.  While I wont summarize the entire article here, there are some key points:
  • Prices in the US are higher and speeds are lower
  • Most US markets are served by a duopoly (telco & cable TV company)
  • Government has a roll in encouraging competition by opening up the last mile
Specifically, due to the cost and logistics of running infrastructure (wires, cable, fiber....) to each home, there are usually very few providers who have invested in such a venture.  Generally these have been the telephone companies and cable TV companies.  Both of which have done so under grants of monopoly and/or local franchise agreements.

In the European countries highlighted in the video, the governments have forced the incumbent local providers to allow competitors to use the last mile loops going to each home.

Of course, Verizon and AT&T think this is a horrible idea (except when it benefits them by allowing access to the European markets where they have no last mile infrastructure).

Maybe it is time to consider dedicating last mile infrastructure to a quasi-governmental authority like water and in some cases power.  But, in a way, isn't that what we've done by granting (and in many cases maintaining) monopoly status to the duopoly?

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