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The New York Times reported on Wednesday that the U.S. has sunk to 25th in a global ranking of Internet speeds, just behind Romania.
Why? Because our nation's regulators abandoned an earlier commitment to foster competition in the marketplace for Internet access providers.
In the years that followed the signing of the 1996 Telecommunications Act, lobbyists working for powerful providers like AT&T, Comcast and Verizon pressured a compliant FCC to tear down all of the important safeguards established by Congress.
Under the Bush administration, the FCC tossed out competitive broadband safeguards such as open-access requirements, which opened lines to other providers. In 2002 the agency declared that high-speed cable Internet access would no longer be considered a telecommunications service that opened the network to competitors, but rather an “information service” that did not. Following a 2005 court decision, the FCC also reclassified broadband delivered by the phone companies as an “information service.”
These were radical policy shifts that went against the long-held assumption that open communications in competitive markets were essential to economic growth and innovation.
While the U.S. blindly followed a path of "deregulation," other nations in Europe and Asia beefed up their pro-competitive policies. The results are evident in our free fall from the top of almost every global measure of Internet services, availability and speed.
About this my Free Press colleague Derek Turner writes:
"By turning its back on the 1996 Act, the FCC ordered up a future of digital mediocrity and stuck American consumers with the bill. Americans pay more per month for broadband than consumers in all but seven of the 30 nations in the Organization for Economic Co-operation and Development ... When price and speed are considered together as a measure of value, we see that Americans pay more per megabit per second than consumers in many other countries. The value of U.S. connections is some four times less than that of countries like France, and is only slightly better than the value of connections in Hungary, a country with a per capita GDP nearly two-and-a-half times lower than the United States."
The lack of competition has turned America into a broadband backwater. In the aftermath of the FCC’s decisions, powerful phone and cable companies legislated and lobbied their way to controlling 97 percent of the fixed-line residential broadband market — leaving the vast majority of consumers with two or fewer choices of land-based providers in any given market.
The absence of true consumer choice has driven prices up and services down. Wednesday'sNew York Times reports that in some parts of the country the situation has had a direct impact on economic growth, education and public safety.
"This is about our overall competitiveness," Jonathan Adelstein of the Rural Utilities Service told the Times. "Without broadband, especially in rural areas, kids might not reach their full potential. And we can’t expect to be competitive in a global economy."