Telecoms and TV Want to Kill America's High-Speed Internet
The United States may have invented the internet 25 years ago, but when it comes to web access, it is on a downward slide. The U.S. international broadband ranking, which measures speed, price and availability, has been falling every year since 2001, putting American business at a global disadvantage.
The FCC has introduced a new National Broadband Plan that would provide billions of dollars to upgrade America's internet infrastructure. But the nation's telecom and TV giants are already fighting the plan, hoping to protect their own interests.
Internet service in the U.S. is slower and more expensive than it is for its global peers (see chart above; click for a larger version). According to the Information Technology and Innovation Fund, Japanese web users get 14 times faster access for one-twelfth the price. Of course, wiring a country as large as the U.S. is more difficult than in Japan. But places like Canada and Poland have also left the U.S. in the dust.
One part of the FCC's new plan is to auction off portions of the broadcast television spectrum so it can be used for mobile internet. "The TV broadcasters will fight this," says ITIF President Robert Atkinson, "But the FCC is right on the money." This would take mostly unused channels and convert them so they can provide the next wave of 4G mobile service. That would increase competition, especially in hard to reach rural areas.
Another important change the FCC has proposed is to rework the Universal Service Fund, which currently provides $8 billion a year in subsidies for improving telephone service. "Right now, this fund can't be used for broadband, which is crazy," says Atkinson. The proposed change frightens the telecoms for two reasons. First, it would begin to shrink the subsidies coming their way. Second, it would use that money to fund public-private partnerships, helping to build high-speed networks at the local level, something the big dogs have been fighting for years. Verizon (VZ), AT&T (T), Comcast (CMCSA) and the National Cable Telecommunications Association are some of the big names behind Connected Nation, a lobbying group that tries to prevent federal money from being used to fund municipal broadband networks. They've gotten bills introduced in a dozen states that preclude local government from entering into public-private partnerships to build new high-speed networks. Connected Nation argues that it's trying to keep a level playing field for private industry. But its lobbying also blocks small- and medium-sized companies who might partner with local government. When that succeeds, the stimulus money is awarded to the big telecoms, who install their networks, and charge their rates.
The FCC's new plan hasn't drawn too much heat, mostly because it proposes that the changes take place slowly, and because it would look bad for corporations to openly oppose such improvements. But the legislative work that Connected Nation is doing would undercut the core mission of the FCC's new plan: to expand affordable high-speed internet access. Some companies, like Google (GOOG), have grown so frustrated with America's network that they are going to begin building their own. Maybe Google City will show Americans what is possible, and inspire the FCC to make sure its plans funds infrastructure, not special interests.