Thursday, September 04, 2014

FCC's Wheeler: US needs more high-speed broadband competition | PCWorld

FCC's Wheeler: US needs more high-speed broadband competition | PCWorld: U.S. residents lack meaningful choices for broadband providers that offer 25Mbps or faster download speeds, and the U.S. Federal Communications Commission will push for more competition, the agency’s chairman said Thursday.

While more than 93 percent of U.S. residents have access to a broadband provider, fewer than 15 percent can buy service from more than two wired providers that offer “yesterday’s broadband” with 4Mbps download speeds, FCC Chairman Tom Wheeler said during a speech at Washington, D.C., startup incubator 1776.

“At the low end of throughput ... the majority of Americans have a choice of only two providers,” Wheeler said. “That is what economists call a duopoly, a marketplace that is typically characterized by less than vibrant competition.

As long as Internet service providers own the infrastructure that connects customer premises, there will never be any meaningful degree of competition, owing to the fact that telecommunications infrastructure due to high costs and barriers to entry functions in a natural monopoly market. As Andrew Cohill wrote in his 2010 white paper, that's about as inefficient and senseless as having FedEx or UPS operate proprietary roads to serve neighborhoods that are closed to competing shipping services.

The policy of the United States has been to preserve this very market structure of which the Federal Communications Commission chair laments. What's needed to achieve any level of real competition is to encourage and fund the construction of publicly owned open access fiber to the premise networks where ISPs compete to sell services to customer premises. Call it the public option for telecommunications in the Internet age.

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