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Forget Net Neutrality - ISPs Need Competition

To a great extent, the future of streaming and downloadable content on the Web is what’s at stake in the increasingly contentious debate surrounding Net neutrality. On one side sit the likes of Comcast, AT&T and Verizon, large Internet service providers that are doing their very best to control that future. On the other side sit the likes of Netflix, Google and a host of other media companies that want to make sure their content is accessible to all without any restrictions or disadvantages imposed on them by those who control the Web’s pipes.

However, according to The New York Times, this emerging dispute over the future of video content only serves to underscore “the core weakness of the Internet economy”: the fact that high-speed broadband access is not competitive at all. Indeed, Comcast, a cable provider, and AT&T and Verizon, both DSL, enjoy virtual monopolies in providing Internet service across the country. Just compare Verizon’s FiOS triple-play plan at $84.99 per month to France’s Iliad, which offers a similar service for less than $40 per month.

The difference stems from a ten-year-old ruling in France that forced France Telecom to lease capacity on its wires to rivals at a regulated rate, allowing competitors like Iliad to enter the ISP market. In the U.S. in 1996, the FCC decided against a similar measure because of concerns that it would discourage ISPs from investing in infrastructure. It appears the FCC made the wrong call, the Times says. The end result is a handful of large ISPs that enjoy comfortable monopolies and are not investing in infrastructure anyway. The result is that the U.S. has 15th-highest broadband penetration among OECD countries, and ranks 17th in download speeds. It is also one of the most expensive countries in the world for high-speed broadband access.

Read the whole story at The New York Times »

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