Shrinking consumer broadband choices?

FCC’s decision to extend monopolistic control over the last mile has The Consumer Federation of America and Consumers Union all riled up. They are worried that lack of competition will only increase prices, limit choices, and result in slower innovation. “The FCC today took our country one giant step closer toward solidifying a two-company domination – the local cable and telephone providers — over the consumer Internet market,” said Gene Kimmelman, Senior Policy Director for Consumers Union. “As both industries tighten their hold on high-speed Internet (broadband) access, consumers will see their choices diminish and their bills skyrocket.” “This stranglehold will stifle innovation as these duopolies discriminate against unaffiliated applications and services that in the past have driven the growth of the Internet and the boom in information technology,” Mark Cooper, Director of Research at the Consumer Federation of America, said. “As a result, our country will fall even farther behind Asia and Europe in broadband penetration.”

I agree. FCC is beholden to special interest groups, and has lost all veneer of fairness. Michael Powell thinks that also-ran technologies like WiMAX and Broadband over Powerlines will result in competition, and once again shows that despite his self professed love for gizmos, he really doesn’t have a grasp on technological realities. I think it is time that consumers get to elect FCC commissioners, via the local ballet. No political appointments for this most important body, which is chartered with coming up with unbiased, fair and realistic regulations that affect consumer lives in the future. I think broadband and wireless networks are going to be a key to our future and global competitiveness, and FCC is selling it down the pike. Here is a recent FCC reality check:

  • In the three and a half years that Michael Powell has been Chairman of the Commission, the U.S. had fallen from third to eleventh in broadband adoption.
  • As a result, the digital migration that Chairman Powell has touted has become a migration to a massive digital divide. One out of every two American households with incomes above $75,000 have high-speed Internet connections at home. One-out of every two American households with incomes below $30,000 does not have any Internet connection at home at all.
  • The cause of the failure of high speed adoption is clear, Americans are being overcharged by the cozy duopoly of cable and telephone companies. Cross national comparisons of price show that Americans pay fifteen to ten times as much, on a megabit basis, as consumers in Japan pay. Three years ago the price in America was three or four times as high.