Sunday, April 26, 2015

Media accounts lament lack of "broadband competition" in U.S. but overlook the solution: open access fiber infrastructure

This is how Internet speed and price in the U.S. compares to the rest of the world: So why are Americans paying more for slower service? The answer: There’s limited competition in the broadband market.

In fact, half of American homes have only two options for Internet service providers for basic broadband, according to the Federal Communications Commission. And for faster speeds, a majority of households have only one choice.

Everyone favors competition for Internet services. But what most media stories miss including this one is the only way to get it is through open access fiber to the premise telecommunications infrastructure that offers wholesale access to Internet service providers and other vendors selling services to consumers such as is the case in some of the comparative nations. In the U.S., competition is limited because vertically integrated providers like Comcast, AT&T and Verizon own the infrastructure over which they offer services like data, video and voice.

The story goes on report that "a handful of cities have chosen to create their own municipal broadband services to compete with private broadband providers: Chattanooga, Tennessee, Bristol, Virginia, Lafayette, Louisiana, Cedar Falls, Iowa, and Wilson, North Carolina."

This is inaccurate. These municipalities have not endeavored to compete with the legacy incumbent telephone and cable companies. Rather, they acted to address private market failure on the sell side. Their citizens and businesses want fiber to the premise Internet connections the incumbent providers are unable to offer them.

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