Monday, 25 February 2013
US and the Internet
Today's FT article provides a striking tale on the reasons behind the US' dismal rank in Internet broadband service quality within the OECD. In less than twenty years, the US has moved from #1 to #16, advanced by most European countries, including Hungary and Estonia. The article argues that regulation is the root cause of this slide: the Obama administration systematically protects the Cable industry from competing technologies. Cable is now dominated by a duopoly, Comcast and Time Warner, who between them, basically share the entire US market, keeping prices high for mediocre quality. They have little incentive to invest as have competitors with insufficient scale to justify large capital expenditures needed for laying fibreoptic cable. The choice of the new FCC chief can be decisive in changing the status quo. But don't hold your breadth. Given the huge lobbying efforts of Comcast and its support for the current administration, it is unlikely that things will change.