In 2008, I wrote a paper for the Cato Institute questioning the need for network neutrality regulations; I argued that the Internet’s decentralized architecture made it inherently resistant to mischief by broadband incumbents. While I’m still skeptical about the wisdom of network neutrality regulations, I’ve become more concerned about the state of the broadband market in the four years since writing that paper. In a March article for National Affairs, I made a case for regulatory action to prevent further consolidation of the largest broadband firms.
What changed my thinking was less the theoretical arguments set out in that piece than it was a sequence of developments in the telecom marketplace. It forced me to reexamine my own assumptions about the state of the broadband market. Here are the four most important.
The Berkman broadband report
Telecom policy wonks have held a long-running debate about how the United States stacks up against other nations when it comes to Internet access. In 2009, a team led by Yochai Benkler at Harvard’s Berkman Center produced a voluminous report on the subject which found that broadband service in the United States was distinctly mediocre.
Nice to see him change his mind when he moves out of the white tower of the Cato Institute and white papers into what is actually happening. Funny how the real market so seldom operates in the hypothetical manner espoused by most libertarians.
Many libertarians retreat further into the Cargo Cult world they have created rather than admit a mistake and recognize the real world operates quite differently that their imagined one.
The US is falling further and further behind other countries in its networks. Because there are really very little market forces to make this happen here. Pursuing this course has not helped us compared to the rest of the world.
Cable and telecomes are perfectly willing to cede large swaths of America to the other. That way they can save money by not having to build out their network and actually compete. They can keep the prices high in the areas they serve, control data in ways to get around net neutrality and make a bundle. Why expand into competitive markets?
And there does not seem to be a competing technology on the way that can compete with both cable or the telecoms. Until there is, each will be happy with its fiefdom of customers to gut.