The United States needs to get its internet together

According to a study by the Open Technology Institute, in most American cities, when it comes to internet, we pay more to get less than people living in many other developed nations.

            The reason for this is the monopolies Internet Service Providers (ISPs) enjoy. Essentially, U.S. internet companies have realized that you will pay exorbitant rates for terrible service, because you have no other option; for many Americans, internet access has become as vital as a car to their work and personal lives. In fact, the study finds that 75 percent of U.S. households have only one choice for broadband internet service. “Stop and let that sink in: Three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy,” said Tom Wheeler, former chairman of the Federal Communications Commission.

This all happened because it is really expensive to lay cable—about $20,000 per mile, according to fiber-optic company Otelco. For that reason, ISPs stay in large part out of each other’s service areas. If they were to lay cable in another service area, they would create competition, driving prices down and standards up, something they don’t have to do in areas where they’re the only option, making the task of recouping the cost that much harder.

On occasion, the terrible service offered by most U.S. internet companies has been interrupted by local governments putting together their own ISPs, or outside companies like Google coming in and bringing fiber to a city. When this happens, the results are drastic. Google Fiber has started offering unlimited, free broadband to homeowners in major cities around the country for a one-time payment of $300 or a gigabit fiber connection for just $70/month, both almost unheard of across the United States before then. As soon as this happened, in those cities, the local ISPs suddenly found it within themselves to do what they had been seemingly unable to manage before—provide competitive speeds at reasonable prices.

While this is fantastic for those cities, it won’t work for the U.S. at large, as for smaller cities and especially rural areas, there just aren’t enough customers to justify the cost of competition. This is called the “last mile problem.”

As such, the internet market for most of the U.S. has stagnated, and the U.S. has fallen behind the rest of the developed world in its internet service. This begs the question: what is the rest of the world doing that we aren’t? The answer is a fairly simple and elegant rule, used by many countries around the world, especially those in the European Union. This policy, called “local loop unbundling” forces internet companies to rent space in their pipes to other companies. Suddenly, barrier to entry is greatly reduced, and a new internet provider startup company doesn’t require a massive multimillion-dollar investment to begin reaching even a small service area.

Of course, were such a change to be attempted, our internet service providers would fight it with every penny they had, and they would fight it because it would work. In cities where local loop unbundling is implemented, such as Zurich, Bucharest, and Paris, it takes only seven seconds to download an entire HD movie and users pay as little as $30 per month for the privilege. That’s more than a hundred times faster than our $30 offerings here in Bellevue or Seattle.

With the current state of politics in America, getting a change through tough corporate opposition will be close to impossible, but if it can happen, it will be more than worth it. Even back in 2008, a Pew Research Center poll found that 96 percent of working Americans use the internet, and it is becoming a greater and greater part of our lives every day. If we don’t enact local loop unbundling, not only will we continue to be squeezed dry by Comcast and Charter, but the United States will be left to mire in a competitive disadvantage of its own making.

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