- US internet speed deteriorating
- Few companies formed monopolies
- Lesser competition
- Expensive internet connections
Monopolistic environment has curbed competition, not encouraging companies to provide better services
When it comes to internet, speed is one of the most important things; in fact that IS the only thing that matters. However, the citizens of the US are getting highly annoyed at the deteriorating speed of the internet and to make things absolutely worst, it is also becoming consistently expensive. This event can be highly attributed to the large monopolies which haven’t left any room for competition and hence they can get away with the provision of such sluggish services. Compared to the fast internet services provided in other counties around the world, what we find here in the US is absolutely disappointing.
Even a high definition movie takes about seven seconds to download in Seoul, Hong Kong, Tokyo, Zurich, Bucharest and Paris and for this fast connection people don’t have to pay more than $30 for a month. However, as opposed to this, the fastest internet connection downloads a movie in 1.4 minutes and for this the users have to pay $300 a month as reported by The Cost of Connectivity. The report was published on Thursday by the New America Foundation’s Open Technology Institute and it compares Internet access in big American cities with access in Europe and Asia. It might sound surprising that some smaller American cities such as Chattanooga, Tenn.; Kansas City (in both Kansas and Missouri); Lafayette, La.; and Bristol, Va. tied for speed with the biggest cities abroad. And surprisingly in each of these cities, these fast connections are not provided by larger known companies. These connections are mostly provided by a city-run network or start-up service.
Those who have given some thought to the issue claim that US doesn’t lag behind in speed of the internet because of technology but it is because of the economic policy problem which has resulted in lack of competition in the broadband industry. Tim Wu, a professor at Columbia Law School who studies antitrust and communications and was an adviser to the Federal Trade Commission said “It’s just very simple economics. The average market has one or two serious Internet providers, and they set their prices at monopoly or duopoly pricing.”
As for those who want high-speed Internet at 25 megabits per second, they don’t usually have many options as stated by Federal Communications Commission. They can either go for Comcast, Time Warner, AT&T or Verizon. This is something which those who have shopped for internet know well. This issue keeps getting worse as you move towards the rural areas. Internet speed isn’t important for the sake of entertainment, but it is crucially important for those who earn through online jobs or need the internet for education purposes.
“Stop and let that sink in: Three-quarters of American homes have no competitive choice for the essential infrastructure for 21st-century economics and democracy,” Tom Wheeler, chairman of the F.C.C., said in a speech last month.
The question remains whether these companies are going to compete if left alone or there is any need for regulation. Faster internet connections in most parts of Europe come as a result of the government interference which regulates competition and forces companies to offer better services. In the US however, the Federal Communications Commission in 2002 reclassified high-speed Internet access as an information service, which is unregulated, rather than as telecommunications, which is regulated. It hoped to see the internet providers compete with one another but unfortunately that didn’t happen.
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