The Economist Again Blasts US Anti-Competitive Telecom Policy

The Economist has again editorialized about US telecom policy, in this case specifically about network neutrality.

This debate is loudest in America, uncoincidentally the developed market with the least competitive market in internet access. Democrats, who are in favour of net-neutrality rules, insist regulation is needed to prevent network operators discriminating in favour of their own services. A cable-TV firm that sells both broadband internet access and television services over its cables might, for example, try to block internet-based video that competes with its own television packages. Republicans, meanwhile, worry that net neutrality will be used to justify a takeover of the internet by government bureaucrats, stifling innovation. (That the internet’s origins lie in a government-funded project is quietly passed over.)

They take a fairly middling approach, regarding the network neutrality rules as decent, arguing that some measure of discrimination should be allowed and could be beneficial (one wonders if they truly thought deeply about this: before YouTube, connections would have been optimized against streaming traffic and YouTube may never have succeeded).

In any event, they answer their own question: the real problem in the U.S. is lack of competition among Internet service providers.

These details are important, but the noise about them only makes the omission more startling: the failure in America to tackle the underlying lack of competition in the provision of internet access. In other rich countries it would not matter if some operators blocked some sites: consumers could switch to a rival provider. That is because the big telecoms firms with wires into people’s homes have to offer access to their networks on a wholesale basis, ensuring vigorous competition between dozens of providers, with lower prices and faster connections than are available in America. Getting America’s phone and cable companies to open up their networks to others would be a lot harder for politicians than prattling on about neutrality; but it would do far more to open up the net.

Unfortunately, they do not consider another remedy: local ownership that is accountable to the public. This approach can offer both competition (via open access) as well as ensuring general network management puts community needs ahead of what is merely best for the owner of the network.

The FCC is in a bind as the only way to create a competitive marketplace for broadband services is via open access policies -- such policies require strong leadership either at the FCC (not happening) or in Congress (ha!). At a minimum, the FCC should use its power to overrule states that have preempted local authority to build and own broadband networks, ensuring that every community has the power to build the infrastructure it needs.