22 November 2006

Telecom Deregulation Has Prevented Progress

A good overview on how telecoms have failed to deliver.

By 2006, according to telecommunication companies’ own documents, 86 million customers in the United States should have received 45 Mbps service. In fact, South Korea and Japan do even better: they routinely offer 100 Mbps connections in both directions, uploading and downloading, for around $40 per month. But in the United States, the best connections top out at 1/3 this speed and cost 400% more... The United States once led the world in Web technology. What happened?

The answer is, the merger of the phone companies that control the phone networks decreased competition. Instead of deploying the high-speed fiber-optic lines they promised, they were content to collect profits, tinker with existing copper connections instead of rewiring, and roll out inferior DSL services. The FCC defines anything above 200 Kbps as broadband (1000 Kbps = 1 Mbps), allowing them to claim that Americans have broadband access. However, this definition is a politically-driven embarrassment for technologists, the equivalent of two tin-cans with string.

Yet—and here is the most troubling part—the phone companies got paid anyway. Through tax breaks and increased service fees, Verizon and the old Bells reaped an estimated $200 billion since the early 1990s to improve subscriber lines in the United States. And what have American consumers received? The most common DSL Service over the old copper networks tops out at 768 Kbps in most areas—a hundred times slower than routine connections in other countries.

1 comment:

Nemo Wolfe said...

Verizon customers are, in fact, getting a lot more fiber optics (currently hurting Verizon's stock price). Verizon intends to compete seriously with cable.
We can only dream here.