Net Neutrality Part 2

Last week I wrote about what Net Neutrality was and asked the question; "How can there be true Net Neutrality with no competition?"

"First, the broadband market suffers from a pronounced and intractable lack of competition. At best, consumers have a choice today between a telephone company and a cable company. The Congressional Research Service has described the current market as a “broadband duopoly,” where telephone and cable companies face little real competition. The FCC’s own skewed July 2006 figures still showed an overwhelmingly concentrated broadband market, with telephone companies and cable companies controlling access to 99.6 percent of all U.S. consumers. The share of alternative broadband platforms also has been decreasing steadily over time, from a less-than-impressive 2.9 percent in 1999 to an anemic 0.4 percent today."(1)

As it stands today, some smaller markets don't have a choice in broadband ISPs. The FTC claims that everything is just fine. Net Neutrality advocates are in disagreement with the FTC, claiming that the status quo has the country in a stranglehold. Here are some interesting points that Jason Miller, a WebProNews writer, brings up.

1. There was a default on $200 billion in taxpayer contributions to build out broadband services. ISPs were supposed to reinvest ear-marked profits to expand the broadband infrastructure and services, but this never happened.
2. Broadband prices are 40 times cost.
3. There is a median download speed of 1.97 megabits per second in the US and Japan has 61 megabits per second.
4. There is a current telco/cable duopoly whereby nearly 100 percent of the public has two choices of (slow) broadband providers.
5. New providers experience enormous cost barriers to entry into the broadband service market.
6. Efforts to block competition by ensuring the soon-to-be-available 700 MHz wireless spectrum (ideal for true wireless broadband) is bought up and hoarded by incumbents."

A great example of this is happening here locally. Less than 5 miles away there is a local utility that provides 5-7mbps download broadband for about $40 per month. Here, 3-5mbps will cost you $110 per month. So where does this leave the American people? What is the future of ISPs and broadband connectivity? We will have to see.

1.Courtesy of Richard Whitt, Washington Telecom and Media Counsel on the Google Public Policy Blog