Americans Paying Higher Prices For Broadband Than The Rest Of The World

Broadband Internet is indeed expensive in America. But it is due to corporate efforts to minimize investment and competition.

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Getting what we consider normal internet now, as in broadband internet, is an expensive endeavor.  To give an example, it costs $45 per month just to get what is considered "acceptable" broadband from cable provider Comcast locally, which is equivalent to getting the cheapest insurance option from Obamacare:  It covers the bare minimum, and that's it.  To get a more manageable speed, a person has to pay at least $20 per month more.  What is worst, too, is that in most places, it is usually only Comcast or a different corporate provider offering service, especially in rural areas.  Now, it has been studies prove that American customers spend the most on broadband Internet in the world, nearly $90 per month, while only getting an average of 50 Mbps for that level of service.  In comparison, the French pay around $35 per month for double that speed.  There is a group of people you can thank for this mess:  Wall Street, who wish to maximize profits by minimizing investment and competition.

Following laws passed in the early 1990s that intended to "foster competition" between cable and telephone companies, the exact opposite happened:  Corporations consolidated large swaths of cable markets in the country, and essentially gained local monopolies on municipal cable and phone line infrastructures.  This was especially the case in cable, where a cable company essentially has complete control of the cable lines in any given city.  This development is supported heavily by Wall Street investors, who believe that competition of any kind undercuts corporate profit, which undercuts their personal profits.

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Furthermore, the problem with "fostering competition" was that competition was fostered between infrastructures, rather than the companies that could run them.  Broadband internet of any kind, especially any improvements such as fiber-optic internet, requires a significant investment in infrastructure, either by digging up and laying lines of cable, or building towers.  Wall Street hates, abhors, and wants nothing to do with any infrastructure investment, especially these days: Infrastructure is a long term investment, with no immediate return on the investment.  Shareholders want immediate returns on their investments in modern times, otherwise they will refuse to invest, period.  Cable, and to a certain extent phone companies, took advantage of this situation because they did not need to make significant improvements to their cable or phone lines in order to provide broadband internet.

Supporters of broadband providers have argued otherwise, claiming there are choices such as satellite, wireless, and 4G service.  But pointing out 4G phone service as a choice is dishonest, for 4G is designed specifically for smartphones and tablets, not for data-hungry computers, Rokus, and video game consoles.  More useful wireless service remains fairly restricted to a certain few cities due to lack of infrastructure.  Satellite service is only a choice for those living out in rural areas, and even then, the choice comes with data caps, which limit the amount of data you can use in a given month.

Furthermore, if there is such a thing as choice in these areas, why is it that, when a local city decides to provide cheap internet access, the local provider's response is to lobby for laws that ban it?  Is choice such a bad thing?  Broadband providers remain more interested in their shareholders than their customers, and will fight to protect their interests rather than consumers.

Competition needs to be reasserted.  If it means re-regulating the telecommunications industry, so be it, for it will be harder to tell shareholders to stop being greedy.  Infrastructure-based competition remains an illusion, Google Fiber a minor exception that proves the rule due to its slow, limited rollout.  Only by being forced to compete will companies do better at improving service at a rate that makes sense.