November 3, 2013
Broadband More Expensive In The US
Broadband Internet is much more expensive in the US than in other parts of the world. In many cases, people in the US pay twice as much as in Europe, and three times as much as in South Korea.
I always thought of the US as being a little cheaper than Europe. It certainly is for hotels and transport, and very often for drinking in the bar. Unless you count the tip, which is bewildering to Europeans for just one drink. But according to the BBC, broadband is one of a number of things in the US that is more expensive than in the UK, along with haircuts and loaves of bread (to name a random couple).
The broadband figures come from the think tank New America Foundation. They showed that in San Francisco, one of the most expensive cities in the US for broadband, at lower to mid download speeds, people pay much more than double what they pay for the same service in Paris and London. They also pay more than Toronto. New York and Washington were a little behind San Francisco, but still ahead of other cities outside of the US where the general cost of living is comparable.
In a similar report earlier this year from the OECD, which compared costs of high speed broadband across 33 countries, the US and Canada were way ahead of the UK, France and Japan in terms of cost, with the US a little ahead of Canada. Some US citizens are paying more than $200 a month.
Analysts say that the problem arises from a lack of competition. Since deregulation 10 years ago, the market has been swallowed up by one or two monopolizing providers. Two-thirds of people get their internet through the cable TV providers, where options are very limited.
Where there is a public option, costs are cheaper. Residents of Lafayette, Louisiana, can get 15Mbps from the municipal Internet service for $35 a month. But such an option only exists in 1 in 10 cities, and many states discourage it. In her book Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, author Susan Crawford says that there is a ‘digital divide’ created by a situation in which providers are allowed to act in complete self-interest, just like the banks were before the economic crisis of 2008.
The broadband problem does soon start to appear as a case study for a bigger issue. The same arguments in favor of non-regulation appear (not least vociferously from those who have something to gain) as they do in relation to healthcare and many other things. Namely, that complete openness leads to competition, which in turn leads to a better range of options for customers. This may be true for a while, but in the end the wealth and control gets channeled into the hands of a few. Broadband could be an analogy of US and world economics since World War Two.
But I suppose nobody had better complain or ask that anything be done about broadband prices. Certain sections of the Republican Party will probably call them commies, claim they hate freedom, and then hold the country for ransom on the edge of a fiscal cliff.
Image Credit: Denis Rozhnovsky / Shutterstock