If you have visited Hong Kong or South Korea or Japan or any of the countries of Western Europe and done some web-based work in your hotel room and bought an airplane ticket and streamed some movies and music, you might have been impressed. “Wow something has changed!” Fifteen years ago, it was hard to do internet anything in Europe. But the speed of the internet there is good now — that is to say, so much better than it is here.
What happened? As American journalists are just beginning to figure out, the free market happened. Deregulation, that’s what.
The 1996 Telecommunications Act was supposed to foster competition. According to the language of the act itself, it was designed to “promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.” It reduced regulation. The rest not so much.
There was no way for small start-up companies to lay cables and set up infrastructure, of course. That kind of talk was just a sales pitch for the C-Span audience. Once the bill passed, the big telecom and cable companies, free of oversight, divvied up the market.
So now we’re stuck with internet from 2005 and another lesson we didn’t need about the “free market.”
As John Aziz at the Week puts it:[blockquote]The idea of a regulated market being more conducive to competition may be alien to free-market ideologues, but telecoms and the internet is a real world example of deregulation leading to monopolization instead of competition in lots of markets.[/blockquote]
He has put together a good rundown with links here.[ Image by Nicholas Nova ]