• Economist, Friday, January 18, 2008 10:45 AM

Easy, cheap access to broadband has been central to the Internet industry's rapid economic growth, but it's not getting any easier for competitors to enter the U.S. market, which means it's not getting any cheaper for consumers. Meanwhile, the U.S. also languishes mid-table among the rich OECD countries in terms of broadband speed. Japan is the undisputed leader with an average download speed of 95 megabits per second. France and South Korea are second and third, respectively, with speeds that are less than half as fast.

Why the vast difference in speeds? In the U.S. "a lack of competition-boosting oversight" is partly to blame, as most Americans have a choice between just two (or sometimes only one) ISPs in their region. The result is that operators don't feel compelled to offer faster access. The price for Web access in America has been driven up by a lack of competition, whereas in most other countries it's dropped.

Recent court rulings in the U.S. also have made it easier for network operators to keep out competitors, by forcing them to build their own networks instead of licensing unused lines from rivals. This is too expensive a proposition for most would-be entrants.

Read the whole story at Economist »