Sunday, July 22, 2007

Report: American consumers trapped in stagnant duopolistic broadband market

The United States has a broadband problem. All of the excuses offered to explain away America’s performance on the international broadband stage are just that: excuses. The fact is that many countries continue to deploy and adopt broadband at a higher level than in America. Consumers in these countries pay far less for far more service, and have many more marketplace choices.

American consumers are trapped in a duopoly marketplace with no relief in sight. The boasts of “third-pipe” competition from wireless providers ring hollow, as the offerings from these companies are slow, expensive, and extremely restrictive, making them unattractive as a true competitor to the current duopoly.

Incumbents argue that the marketplace will save our sinking ship, even as the water level rises. This blind faith in the market would be reasonable if the U.S. telecommunications market was perfectly competitive. But it simply is not, and it’s high time to face reality.

We rely on the market forces of a duopoly to produce robust cross-platform competition at our peril. When the chief supporters of the status quo, wait-and-see approach to the arrival of a third competitor to DSL and cable are the incumbents themselves, we should understand that they do not expect it will happen.

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