It’s been an exciting week for Internet advocacy in the United States. To put it in crude, succinct, and kinda androcentric-and-infantilizing terms, the Federal Communications Commission grew a pair and ruled to…
- regulate ISPs as a Title II Common Carrier instead of a Title I Information Service Provider.
- prohibit restrictions against community broadband, such as those in Chattanooga, Tennessee and Wilson, North Carolina, where they get faster and cheaper Internet access than in New York City.
Everyone has gone gaga over the first ruling, but I think the second one is just as crucial. Why? If net neutrality is “Obamacare for the Internet,” community broadband is the “public option” we didn’t get with the Affordable Care Act. It subjects commercial ISPs to competition that is primarily concerned with serving its citizens rather than enriching its shareholders.
The commercial ISPs have complained that if they were subject to Title II common carriage regulation, they would be less inclined to invest in their infrastructure. They would be less likely to expand access, and they would be less likely to increase broadband speeds in the coming years. In other words, they would act like a telecommunications monopoly with little incentive to improve their product. Guess what? They already behave that way.
Most of the country lacks access to viable broadband. For many of those who do have access, they face a Hobson choice when selecting Internet service providers. As for average broadband speeds, at 11.5 Mbps, the United States is hardly in the lead. We rank somewhere between Taiwan (9.5 Mbps) and Singapore (12.2 Mbps) among Asian nations and between Israel (11.4 Mbps) and Finland (11.7 Mbps) among EMEA nations.1
Throughout the twentieth century, AT&T, the telephone monopoly in the US, improved the technology to connect local and long-distance calls more efficiently, but the end-product was more or less unchanged for seven decades. AT&T held a monopoly over US telephone service beginning in 1913, under the Kingsbury Commitment, until 1984, when it was forced to fragment and sell its local exchanges into seven regional Baby Bells. In that time, there were very few functional improvements to the telephone receiver.
Comparing two receivers—one from the 1930s and one from the 1980s—it’s hard to tell what specific improvements there were. Both receivers consisted of a dial and a corded handset, and you could have one in any color you wanted… as long as you wanted black. Why was there no speakerphone? Where is the touchtone keypad? Why couldn’t someone put a call on hold or mute the receiver? If someone missed a call, why couldn’t the phone indicate so with a notification? And, why could someone not walk around any further than the length of the receiver’s cord?
The key reason why AT&T did not innovate and improve its product for the consumer was not because it was closely regulated as a utility and that it had to provide universal access, it was because it was a monopoly and no had little incentive to innovate. It was not until the 1980s that consumers were finally able to connect foreign attachments to their telephones, such as answering machines and modems, purchase their own phones, including cordless and touchtone devices, and choose their own long-distance telephone provider and calling plan.
In other words, with viable competition in underserved markets, commercial ISPs will be forced to, in the words of countless entrepreneurial free-marketeers, “innovate or die.”
Updated because the new WordPress for iOS app turned my Markdown into HTML. Yuck.
- This is based on Akamai’s State of the Internet report for the third quarter of 2014. http://www.akamai.com/dl/akamai/akamai-soti-q314-infographic.pdf ↩