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21
May
2014

The Case for Regulating Internet Service More Like a Utility

by Bill

Net NeutralityIn many cases where regulations designed to protect the public domain have been rolled back, private enterprise has taken advantage of that freedom with a seemingly small interest in what benefits the greater good, if any at all.

From the savings and loan system collapse of the 80’s and the mortgage derivatives crisis of the oughts, to the consolidation of hundreds of ISPs into just a few companies that now are demanding higher fees from content providers, in the wake of the collapse of the FCC’s Net Neutrality doctrine – the private sector has shown that profit motives often win out, even when they are starkly in contrast to customer interests public advocates.

The barely regulated consolidation of cable television and internet providers continues unabated, hot on the heels of the proposed Comcast-Time Warner merger comes news that AT&T is looking to buy DirecTV in a deal valued at over $48 billion.

Where there were once hundreds of ISPs competing, consolidation has left just a handful that now dominate more than 90% of the marketplace. It would be one thing if they were consistently providing top-notch service and low pricing, but the exact opposite is the case according to some industry watchdogs. Americans now pay more money for less service than nearly ever other developed nation according to some broadband analysts.

Now the latest net neutrality battle, where Netflix paid Comcast additional fees for its customers to have un-throttled connections to the streaming entertainment giant is another symptom of how the ISP industry appears to only about maximizing profits, while providing as little service as is necessary to placate regulators.

Google, a bandwidth-intensive supplier of content through their YouTube property, has now rolled out Google Fiber, launching gigabit fiber systems in Kansas City and Austin Texas as well as taking over an existing fiber network in Provo, Utah. Google Fiber is currently in the planning stages in nine other small to midsize American cities, and reportedly it is shaking up the complacency of some local ISPs who long maintained that Americans had no use for next generation internet service, as they continued to harvest revenue without investing in enhancing their infrastructure.

Cynics argue that Google is only shaming other ISPs because it benefits their own content-theft practices but there seems to be a consensus forming that the impact is now being felt by lethargic ISPs. City governments have also come to realize that providing internet service is a boon for their local economies, as 50 municipalities in the United States offer free WiFi to those within city limits, and Chattanooga has their own municipal fiber broadband that offers gigabit service for just $70 a month. That’s 1000 megabits per second, compared to the average US connection speed of only 9.8 megabits per second. The City of Chattanooga had to contend with lawsuits from its local incumbent cable operator, Comcast, however it prevailed in court, and as of this writing it serves over 57,000 households and 5,000 businesses, providing a bundled “triple-play” package just like the private ISPs, though over 100 times faster and at a significantly lower price. Fast and inexpensive internet service in Chattanooga is credited with attracting a growing local tech sector and bringing in new businesses that rely on fast inexpensive internet service.

In the digital age those regions with substandard internet infrastructure will lose out to those with truly-broad broadband and the incumbent ISPs don’t seem to see it as something they have a stake in providing. Some advocates have now made the case that broadband connectivity is also a human rights issue, and as the internet has become so critical to living in this modern world – the case against leaving it all in the hands of unregulated monoliths may now be gaining momentum.

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