For decades now we have been going down the road of deregulation and privatization. The promise is always the same. Competition, leading to more choice, more efficiency, lower prices.
We also know what the reality has been every single time. Consolidation. Monopolies or near monopolies. Less choice. Lower quality. Higher prices. Lack of oversight and checks and balances leading to abuses. Whether it was the savings and loan industry, electricity and energy production and distribution, commodities and stocks, the results have always been disastrously the same. And yet the conservatives keep pushing the "government is bad and ineffective, let the free market works its magic" message for everything.
One of the latest areas of deregulation to catch my eye is that of telecommunications and the cable industry. In large part this is due to personal experience. We have underground utilities in our neighborhood and so the cable wire comes in through the basement. We have bundled services through the cable company: cable, internet and the land line phones. Until we bundled our services, the internet modem, and our wireless router, were on the second floor of the house, in the study where our desktop computer still resides. However apparently that was too far away from the initial point of entry (the basement) to provide a strong enough signal for the land line. And so the modem and router were moved to the basement.
We adjusted to that. But lately, at least every other day, there comes a time during the day where the internet is "lost". Cable and phone will still be working, but the internet is down. One of us has to go down to the basement, unplug the modem from the strip it's plugged into, count to 10, and plug it back in. Then the internet "reappears".
And don't get my wife started on the cable itself. Remotes that don't work. Features heavily advertised that it turns out you have to pay extra for. Down times where suddenly you can't DVR programs. And then to find out that other people we know in town are being called by the cable company offering them free services or reduced rates, to make up for the inconvenience of this DVR outage. The calls were initiated by the cable company mind you to these friends and relatives, but we get no such calls or offers. We suspect it is because we already have a fairly high number of optional program services so there is less opportunity for the company to entice us to upgrade or add services than there might be for others by "giving" them free trials.
So all this led me to do a little research. I remembered hearing that our experience in the USA is not the norm in other modern, industrial countries, but I figured I'd take a look. Sure enough, the wonders of the free market, free from government interference and regulation, means that Americans are paying more for less service. Sound familiar?
For example, people in the U.S. pay about twice as much for slower internet connection speeds. According to a study by the New America Foundation, in New York City you pay approximately $70/month for slow to moderate download speeds of under 20 mbps (megabits per second). Meanwhile in South Korea you would pay the equivalent of about $28/month for download speeds of about 45 mbps.
A comparison of bundled packages (internet/cable/phone service combined) that includes low to mid-range download speeds found the following internet charges for American cities:
San Francisco $99/month
New York $70/month
Washington DC $68/month.
For the same service in representative international cities:
London $38/month
Paris $35/month
Seoul $15/month.
So why do we find this pattern? According to Susan Crawford, former special assistant to President Obama for science, technology and innovation policy, "Americans pay so much because they don't have a choice".
The deregulation of the telecommunications industry has led to consolidation and even more monopolies in the cable/internet marketplace than existed prior to deregulation. The result, in another quote from the BBC News Magazine article where Ms. Crawford's quote was found, is that "companies face neither competition nor oversight". And so there is no incentive for internet service providers to expand broadband or to build faster networks. The New America Foundation study concluded:
"...the most affordable and fast connections are available in markets where consumers can choose between at least three competitive service providers." This is not the case in most American cities or regions.
Ah, taste the freedom as the dollars fly out of your wallet.
We also know what the reality has been every single time. Consolidation. Monopolies or near monopolies. Less choice. Lower quality. Higher prices. Lack of oversight and checks and balances leading to abuses. Whether it was the savings and loan industry, electricity and energy production and distribution, commodities and stocks, the results have always been disastrously the same. And yet the conservatives keep pushing the "government is bad and ineffective, let the free market works its magic" message for everything.
One of the latest areas of deregulation to catch my eye is that of telecommunications and the cable industry. In large part this is due to personal experience. We have underground utilities in our neighborhood and so the cable wire comes in through the basement. We have bundled services through the cable company: cable, internet and the land line phones. Until we bundled our services, the internet modem, and our wireless router, were on the second floor of the house, in the study where our desktop computer still resides. However apparently that was too far away from the initial point of entry (the basement) to provide a strong enough signal for the land line. And so the modem and router were moved to the basement.
We adjusted to that. But lately, at least every other day, there comes a time during the day where the internet is "lost". Cable and phone will still be working, but the internet is down. One of us has to go down to the basement, unplug the modem from the strip it's plugged into, count to 10, and plug it back in. Then the internet "reappears".
And don't get my wife started on the cable itself. Remotes that don't work. Features heavily advertised that it turns out you have to pay extra for. Down times where suddenly you can't DVR programs. And then to find out that other people we know in town are being called by the cable company offering them free services or reduced rates, to make up for the inconvenience of this DVR outage. The calls were initiated by the cable company mind you to these friends and relatives, but we get no such calls or offers. We suspect it is because we already have a fairly high number of optional program services so there is less opportunity for the company to entice us to upgrade or add services than there might be for others by "giving" them free trials.
So all this led me to do a little research. I remembered hearing that our experience in the USA is not the norm in other modern, industrial countries, but I figured I'd take a look. Sure enough, the wonders of the free market, free from government interference and regulation, means that Americans are paying more for less service. Sound familiar?
For example, people in the U.S. pay about twice as much for slower internet connection speeds. According to a study by the New America Foundation, in New York City you pay approximately $70/month for slow to moderate download speeds of under 20 mbps (megabits per second). Meanwhile in South Korea you would pay the equivalent of about $28/month for download speeds of about 45 mbps.
A comparison of bundled packages (internet/cable/phone service combined) that includes low to mid-range download speeds found the following internet charges for American cities:
San Francisco $99/month
New York $70/month
Washington DC $68/month.
For the same service in representative international cities:
London $38/month
Paris $35/month
Seoul $15/month.
So why do we find this pattern? According to Susan Crawford, former special assistant to President Obama for science, technology and innovation policy, "Americans pay so much because they don't have a choice".
The deregulation of the telecommunications industry has led to consolidation and even more monopolies in the cable/internet marketplace than existed prior to deregulation. The result, in another quote from the BBC News Magazine article where Ms. Crawford's quote was found, is that "companies face neither competition nor oversight". And so there is no incentive for internet service providers to expand broadband or to build faster networks. The New America Foundation study concluded:
"...the most affordable and fast connections are available in markets where consumers can choose between at least three competitive service providers." This is not the case in most American cities or regions.
Ah, taste the freedom as the dollars fly out of your wallet.
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