Broadband For The Buck
STORY BY David Vyorst
Published: April 30, 2013
Access to broadband internet is vital for economic innovation and growth, therefore ensuring the highest levels of competition and access are key to the future of the economy. Recently several high profile studies have examined the state of broadband competition in the United States and reached different conclusions.
In light of the debate that current work encompasses, I organized a panel for the Washington DC Chapter of the Internet Society (ISOC-DC) to examine the state of broadband competition and the resulting policy prescriptions. The panel took place last Friday at the Information Technology and Innovation Foundation (ITIF) here in Washington, D.C.
A cornerstone of the debate is focused on the question whether American consumers pay more money for slower speeds. On the public interest side of the aisle, the summary in the New American Foundation’s “The Cost of Connectivity Report” sums up the“American consumers pay higher prices for slower speeds” perspective pretty well.
On the “competition is pretty robust and U.S. consumers are getting a pretty good deal” side of the the question, the Information Technology and Innovation Foundation’s (ITIF) The Whole Picture: Where America’s Broadband Networks Really Stand report counters the New America assumptions and paints a pretty rosy picture of American broadband competition.
Critics of U.S. ISPs can point to lower prices for broadband in most countries, especially in Europe where “Strong regulations and strong monitoring of anti-competitive behaviours are the key, as well as public money being invested in mutualized infrastructures” has led to more robust consumer choices.
Proponents of the industry-centric view, as articulated in the ITIF study counter the view that broadband is generally more expensive in the United States with two principle arguments. The first is that American geography is more vast with lower population density and the second that such studies don’t use valid numbers in their price and Internet connection speed comparisons.
Both arguments may have some validity. Connecting rural areas in the U.S. does cost more and because of the conflation of triple plays and byzantine pricing schemes, it can be difficult to compare apples to apples. However, the population density counter argument doesn’t explain city to city comparisons. Even with varying price points, common sense dictates that the OECD’s breakdown of prices/megabit/seconds of advertised speed is probably a good benchmark.
One of the chief policy tools to ensure competition is unbundling, or open access policies that require incumbent broadband providers offer to lease capacity on their networks to new entrants selling competing Internet services to consumers”. Unbundling policies were abandoned in the U.S. by the FCC almost ten years ago. Unbundling is predictably an issue that the public interest and industry-centric analysts vehemently disagree upon.
In order to facilitate a robust exchange of ideas between these perspectives, we invited the authors of the New America Study as well as the authors of the ITIF study. Originally both “sides” accepted and the event was to be held at the NAF, but sadly the New America Foundation team pulled out for specious reasons, which was really too bad because their report was a large part of the motivation for the event in the first place. As a public advocacy sympathizer I had really wanted to see them go toe to toe with top industry economists. The final panel included Robert D. Atkinson, the president of ITIF and author of its report, AEI economist Jeffrey Eisenach, a meat and potatoes deregulation, free market guy, and Robert C. Atkinson of Columbia University, the key author of the Broadband in America Report, as well as Jodie Griffin, a Staff Attorney at Public Knowledge and author of a powerful series of blog posts about “Five Fundamentals to guide the upgrade of our phone network to an IP-based infrastructure”. The panel was moderated by Dave Burstein, the Editor of DSL Prime. What ensued was an incredibly lively, albeit industry-centric discussion covering the state of broadband and what the objectives of policy should be. The video clips are below, they’re pretty impressive. I guarantee that you will learn something from them.
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