America's High-Cost Low-Performance Internet
HandelontheLaw.com Staff Writer
According to an annual report published by New America Foundation’s Open Technology Institute, Americans pay as much as 10x the amount for half the speed of internet, compared to their Asian counterparts. The complete report can be accessed here: http://www.newamerica.org/oti/
Rating the internet speeds and costs in 24 U. S. cities, the Institute found that American internet users pay high monthly rates for internet performance far inferior to that found in other wealthy countries and particularly in Asian countries. Users in Seoul, Korea get internet at the rate of one gigabit per second for about $30.00 per month. Gigabit internet is as much as 100x faster than the internet used by many Americans. Tokyo and Hong Kong internet also “beats the pants off” normal American internet connections in both speed and cost. In comparison, internet speeds in Los Angeles, New York and Washington D. C. are half that speed but cost $300.00 per month. The Institute’s 2014 findings are akin to its findings for prior years.
Why the striking differences in speed and cost? Internet advocates say that major U. S. providers, such as Comcast and Time-Warner, have so little competition that they have poor incentive to improve performance and lower costs. In addition, at least 19 U. S. states legally restrict publicly owned broadband networks. According to internet advocates, the laws and supporting legislators are backed by major internet providers such as Comcast and Time-Warner in an effort to limit the competition that would force them to improve service and lower costs.
The major providers’ efforts to limit competition are logical, given the excellent performance and low cost of internet in U. S. cities providing their own broadband networks. Approximately 30 states allow publicly owned broadband networks and some cities have taken the lead in providing broadband to their residents. Chattanooga, TN and Lafayette, LA are two such cities. Chattanooga was the first to offer citywide gigabit-per-second broadband service in 2010, initially costing $300.00/month but now costing approximately $70.00/month. Lafayette’s citywide gigabit-per-second network initially cost $1,100.00/month but is down to approximately $110.00/month.
Though major providers tend to offer slow internet at high cost, at least one is pursuing faster speeds at lower costs: Google Fiber, currently available in Kansas City, provides gigabit service for approximately $70.00/month and is expected to expand to other mid-sized cities such as San Antonio, TX and Portland, OR. Meanwhile, New York, Los Angeles and the nation’s Capital are still held captive by major providers of slow, expensive internet service.
By Kathy Catanzarite
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