Susan Crawford: Why Broadband is Slow and Expensive

Posted by Sam Churchill on

Bill Moyers interviewed Susan Crawford this week. Crawford believes that large cable and wireless companies have become duopolies, essentially carving up the United States to limit competition.

Susan Crawford, the former special assistant to President Obama for science, technology and innovation, has a new book out, Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age. She supports the concept of municipal fiber networks.

According to Crawford, the US government has allowed media organizations to put profit ahead of public interest:

BILL MOYERS: In here you call it the digital divide. Describe that to me.

SUSAN CRAWFORD: Well, here’s the problem. For 19 million Americans, many in rural areas, you can’t get access to a high speed connection at any price, it’s just not there. For a third of Americans, they don’t subscribe often because it’s too expensive. So the rich are getting gouged, the poor are very often left out. And this means that we’re creating yet again two Americas and deepening inequality through this communications inequality.

BILL MOYERS: So is this why, according to numbers released by the Department of Commerce, only four out of ten households with annual household incomes below $25,000 reported having wired internet access at home compared with 93 percent of households with incomes exceeding $100,000? These companies are not providing cheap enough access to the poor folks in this country?

SUSAN CRAWFORD: These are good American companies. Their profit motives though don’t line up with our social needs to make sure that everybody gets access. They’re not in the business of making sure that everybody has reasonably priced internet access. That’s how a utility functions. That’s the way we need to treat this commodity. They’re in the business right now of finding rich neighborhoods and harvesting, just making more and more money from the same number of people. They’re doing really well at that. Comcast is now a $100 billion company. They’re bigger than McDonald’s, they’re bigger than Home Depot. But they’re not providing this deep social need of connection that every other country is taking seriously.

An ITIF report, released this week (pdf summary and full report), paints a different picture. The U.S. has the third-highest rate of wired (DSL & cable) competition in the OECD, behind Belgium and Netherlands, the report said. About 89% of U.S. residents have a choice of five or more broadband providers, counting mobile and satellite, and 85% have a choice of two or more wireline broadband providers, the report said.

While the highest-speed broadband services in the U.S. are expensive, compared to other countries, the country has the second-lowest cost per capita in the OECD, behind Israel, for entry-level pricing, the report said. In real-dollar costs, the U.S. ranked in the middle of OECD for broadband prices for speeds under 20M bps, and fourth most expensive for broadband service above 20M bps. The U.S. is 15th among OECD nations in broadband adoption, the ITIF report said.

More conservative viewpoints say local, regional or federal governments shouldn’t risk taxpayer dollars. Some community fiber projects have been successful, but others have not.

Crawford says 19 million Americans can’t get a high speed connection at any price.

She appears to be mistaken. ViaSat announced commercial 2-way satellite internet for $50/mo a year ago and DishNET offers $40 a month satellite internet access with 5 Mbps down and a 10GB data cap. Most satellite customers can upgrade to a 10 Mbps /1 Mbps plan available with 20 GB of data for $49.99 per month.

But Susan Crawford has a point.

South Korea has launched a nationwide broadband upgrade to rid themselves of 100Mbps service for $38 a month. By the end of 2012, South Korea intends to connect every home in the country to the Internet at one gigabit per second and slash the monthly price to just $27 a month.

Singapore is also building a 1 Gbps network that should now be ready to go.

ABI Research indicates that among the three broadband technologies, 65 percent of worldwide fixed broadband consumers subscribe to DSL, 25 percent to cable, and 11 percent to fiber broadband services. Fiber subscribers are increasing fastest, showing a compound annual growth rate of 20 percent from 2008 to 2014.

A smart city would have ubiquitous fiber and broadband wireless.

Cities have the leverage. They can grant access to public rights of way, with access to street and traffic lights, public buildings and parks.

Cities can borrow money more cheaply and have their own large customer base. Private/public partnerships for fiber and wireless infrastructure are now more attractive because cellular companies realize they need fiber infrastructure to feed hundreds of small cells in every municipality. Sharing fiber makes good business sense.

Cities have options. They don’t have to risk money. They can offer organizations like Gigabit Squared rights of way in exchange for universal service, municipal access, and equal access for competing carriers. Everybody wins.

Related Dailywireless articles include; Dish Turns On Satellite Broadband, ViaSat Announces Commercial Satellite Operation, Small Cells, Big Deal, AT&T: 40,000 Small Cells, Cisco Small Cells, Seattleā€™s Gigabit Fiber CityNet, The Fiber Utility, Google Fiber Launches in Kansas City, UTOPIA Financial Audit: Fail, 1 Gbps Fiber Comes Home, Seidenberg: Verizon 1st in Fiber?, Google: Fiber to the Home? and Broadband Grants Reviewed, RUS Awards $1.2B for Broadband, City Fiber Strategies, US Broadband Sub Count, Hawaii Plans Broadband Initiative, Unlicensed Muni Broadband: Take Two?, Ten Largest Data Centers, The Fiber Utility,

Posted by Sam Churchill on Monday, February 11th, 2013 at 11:12 am .

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