Mind the GapMay 9, 2006
The advertisement on the wall in the subway station was hard to believe — a broadband service with 24 meg download for about $45 per month. That was the good news. Unfortunately, the service isn't available in the U.S. The ad was on the wall of tube stop in London and the company, Be, http://www.bethere.co.uk is British. Just to rub it in a little, it gets better. There is also a cheaper option, about $25 per month, which still gets you the 24 mbps download, but with a slower upload speed. This in a city in which a bottle of water will set you back about $2.25.
Now, let's contrast that combination of price and service with an ad in today's Washington Post, in which Verizon will sell you the blinding speed of 768 kbps for $17.99 per month with a yearly contract.
And for one more bit of shopping — Verizon's FIOS service, their fiber optic super-speedy, up to 30 mbps version. What will that cost you? According to the Verizon web site, up to 30 mbps can be had for between $180 per month and $200 per month.
Be isn't unique in competing in the U.K. broadband market. According to a blurb in the May 4 edition of The Independent, a British newspaper, the broadband market is very crowded. How crowded is it, Ed McMahon asks? It's so crowded that, according to the paper, seemingly everyman and his dog [are] seeking to 'unbundle' BT (British Telecom) exchanges. There's not enough space for all of them — quite literally as it happens, since many of the BT exchanges are not big enough to accommodate all the equipment that would-be competitors are looking to put into them.”
By what magic has such a vibrant and competitive market been achieved, when we here in the U.S. are condemned to a broadband duopoly? Again, from the Independent: “Local loop unbundling has given new entrants such as Sky the ability significantly to undercut the incumbents in the broadband market — British Telecom and NTL Virgin.”
Aside from the remarkable ability of the British to keep their infinitives from splitting, note that it's the very philosophy which we here disdained, local loop unbundling, which has made for a national broadband market which, to the best I can tell from some information at the web site of Ofcom, the British telecoms regulator, has at the moment about 16 competitors. Some offer service to equal BeThere's, some don't. But that's the market for you.
It's the kind of market in which telecom providers can't take advantage of consumers. Unlike here, in which it was reported by Reuters that “Verizon Communications warned the financial services industry (it) may not get the secure networks it needs if Congress adopts laws governing high-speed Internet broadband networks, according to a company memo obtained by Reuters on Monday.”
Or a market in which a top Verizon official again warned that Net Neutrality laws could prevent his company from offering private network health care services over the Internet.
Or a market in which a so-called “conservative” coalition campaigns against Net Neutrality by arguing that allowing network providers to discriminate among content providers could cause telephone and cable companies to raise rates.
The vibrant, competitive market in the U.K. is an example to which U.S. policymakers should aspire. But they don't. The result could well be the broadband gap between the U.S. and the rest of the world will keep getting larger.