By:
Gregory Edward, Jr.
Gigaom
reports that many US customers pay more money for slower Internet and
services than other countries around the world. Their
answer to this problem is competition.
When a small number of large corporations handles the Internet demand
for local markets; new entrants are hindered from entering, decisions
to expanding networks are delayed, and innovative efforts are slowed,
which keep Internet prices high. The same is true for our wireless
phones. With AT&T, Verizon, and Sprint as the main players in the
wireless industries, they are able to control the market price for
mobile phones.
In
Atlanta, Xfinity, U-Verse (AT&T), and Clear (Sprint) are the
major Internet Service Providers (ISPs). Xfinity’s cheapest
Internet plan offers the customer 25Mbps for $40/month. AT&T
U-verse’s plan starts at $41/month for 3Mbps. While Clear’s
cheapest plan costs $35/month for 12Mbps. Unknowing to some, these
plans are often plagued with throttling and data caps. [Throttling is
a measure that ISPs use to regulate network traffic by slowing users’
data activity if they feel they are using too much data. A data cap
is a monthly data limit.]
The
cheapest Internet offered in the world is currently in Seoul, South
Korea, where they pay $31.47 for a triple play bundle, Internet,
television, and phone service package, which delivers Gigabit speeds.
Seoul is known as “the bandwidth capital of the world” with three
major ISPs. The Gigaom report concluded that places with the best
speeds, for the lowest prices, tend to be areas that have at least
three competitive service providers.
Based
on a report by the New America Foundation, it stated in their 2013
Connectivity report that:
“Chattanooga,
Tennessee and Hong Kong continue to offer world-leading gigabit
speeds, but Seoul and Lafayette, Louisiana also joined the speed
leaders, along with Kansas City, Kansas, and Kansas City,
Missouri”…“In larger U.S. cities, we continue to observe higher
prices for slower speeds by comparison.”
EPB,
an ISP in Tennessee, charges $70/month for their 1GB plan. After 4
years of operating, they automatically upgraded all of their current
users from 50Mbps, 100Mbps, 250Mbps plans to their new standard speed
of 1Gbps. Google has entered Kansas and Missouri introducing Google
Fiber, which offers Internet and HDTV at competitive rates. These are
the kinds of competition needed to lower prices across the nation.
The status quo needs to be challenge to compel change.
In
class, Professor Sistrunk told us that during the 1996 Olympics; a
lot of fiber was laid throughout Atlanta to support the event’s
live coverage. But unfortunately today, we only use a small
percentage of the city’s total capacity. If companies would stop
trying to make a profit by using their current limitation and
increase their capacity by bringing the unused fiber online, Atlanta
could become a competitive market.
Some
feel that the most effective way to become efficient with our
Internet and Mobile needs is to have the US government set up the
necessary infrastructure then charge Internet and Mobile Providers to
use their established network. Compared to having each company set up
their own infrastructure from the ground up, which wastes time,
money, and resources.
Internet
Speeds Across the US
Sources
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