NYT op-ed: FCC broadband plan fails to address competition

As I was saying last week, I do not believe the FCC’s National Broadband Plan will bring affordable high-speed broadband to Americans unless it focuses on creating robust competition in the market for broadband services. This means forcing incumbents to open their networks to competitors.

Professor Yochai Benkler (co-director of the Berkman Center for Internet and Society at Harvard University) has written an op-ed in the NY Times expressing the same view about why broadband prices in the US are so high compared to other developed countries and why they will continue that way:

“Prices [in the US] are three to five times that much for the fastest speeds — the highest prices among advanced economies. The Federal Communications Commission’s National Broadband Plan, announced last week, is aimed at providing nearly universal, affordable broadband service by 2020. And while it takes many admirable steps — including very important efforts toward opening space in the broadcast spectrum — it does not address the source of the access problem: without a major policy shift to increase competition, broadband service in the United States will continue to lag far behind the rest of the developed world.”

He goes on to state the obvious: “Unfortunately, though, [FCC] senior commission staff members have essentially conceded in interviews that lobbying pressure from the monopolies is too strong even to begin exploring open access right now.”

FCC and Congress are more interested in allowing large telecom incumbents and cable companies preserve their market position than in creating an open competitive market.

It’s worth your time to read the study that Benkler and his colleagues at the Berkman Center did for the FCC, which the FCC has largely chosen to ignore in its Broadband Plan: Next Generation Connectivity: A review of broadband internet transitions and policy from around the world. I spare no words for people working at the highest level of government whose responsibility is to look after the interests of the country, not the profit and loss statements of a few privately owned firms. They have abdicated their responsibility and do not deserve to remain in their positions.

People who work in Washington DC accuse me of being a wild dreamer, but there is nothing wild about these ideas because they have been put into place in the last 20 years by that most sclerotic of institutions, the European Commission, and the formerly incumbent beholden countries of France, the Netherlands, Germany, Sweden and Finland (as well as the other EU member states). When I moved to the Netherlands in late 1994, there was ONE phone company – KPN – owned by the Dutch state, and they did not even have “call waiting”! KPN still has a lot of market power in the Netherlands, but it is not allowed throw its weight around the way it used to because it is subject to regulation which focuses on creating and preserving an open market for broadband.

The odd thing about the US is that for all the platitudes thrown around by so-called “free market” proponents, the broadband marketplace here resembles the old Soviet Union’s “choice” between Pravda and Izvestiya.

Unless the US aims high, and aims at exactly the the things that need to get done, it will not get there, or it will get there in several decades when it’s already too late.