Thursday, December 08, 2011

Verizon's Broadband Bunk

A recent letter to the editor of the New York Times from Verizon Chairman Ivan Seidenberg had many scratching our heads today.

Seidenberg wrote to rebut a Times Op-Ed by former White House technology adviser Susan Crawford, in which she argues that the United States high-speed Internet marketplace suffers from a lack of competition, a problem that drives broadband prices up and services down for American Internet users.

"Over the last 10 years, we have deregulated high-speed Internet access in the hope that competition among providers would protect consumers," Crawford wrote. "The result? We now have neither a functioning competitive market for high-speed wired Internet access nor government oversight."

Broadband Backwater

Indeed. It’s gotten so bad the U.S. has gone from number one in broadband penetration at the close of the 20th century down to — depending on the survey — 18th, 22nd or 25th in the world. And Americans continue to pay a whole lot more and get a whole lot less of the Internet speeds that we deserve.

Compare our circumstances to those in Japan, for example, where Internet users are accustomed to surfing the Web at speeds of 100 Mbps (or megabits per second) at the same prices Americans pay for dial-up. In Hong Kong, one provider now offers a $20 a month “triple play” package that includes a blistering 1,000 Mbps data service.

Despite the evidence, Verizon's Seidenberg wrote that Crawford was wrong; America's Internet is the best in the world.

"America has a very good broadband story; someone just has to be willing to tell it," Seidenberg argues in his letter to the Times. As evidence he cites a 2011 World Economic Forum global survey, which in the words of Seidenberg “ranks the United States first in Internet competition.”

Say what? I had to see that for myself.

The most recent WEF "Global Competitiveness" report (pdf) features U.S. rankings on page 363. The good news is that we're ranked first in the world for available airline seats. But the United States' Internet rankings are terrible. We’re 18th in the availability of the latest technology, 18th in Internet users per capita and 26th in Internet bandwidth per capita.

Perhaps Seidenberg’s evidence is buried elsewhere. On page 294 of another WEF report (pdf) I found a section on "political and regulatory environments" that featured an Internet and telephone sector competition index.

The report allegedly looks at the level of competition for "retail Internet access services, for international long-distance calls, and for digital cellular mobile services," placing countries on a 0 (worst) to 6 (best) scale.

But it doesn't actually measure market competition beyond determining whether these three separate fields remain state-sanctioned monopolies.

Well, U.S. telecommunications isn't a monopoly anymore. We did manage to break up Ma Bell in the 1980s, but her children are showing every intention to reassemble themselves as a modern-day equivalent. But that hasn't happened. At least not yet, so on retail Internet access we get a 2, indicating that its not a monopoly market; on international long distance we get a 2; and on digital cellular mobile services we get a 2.

Our cumulative score is a 6, according to the report, the best possible ranking — or "first in Internet competition" in Seidenberg’s profoundly misleading interpretation.

Want to know who else came in “first?”

Sixty other countries, including Angola, Burundi, the Kyrgyz Republic, Venezuela and Vietnam.

We’re all Number One!

So if you are proud that the U.S. offers an Internet that's on par with, er… Angola's, stand beside Seidenberg and wave the flag.

But if you agree with Crawford that the lack of true competition in the U.S. has put us on a perilous path, demand that we do more to guarantee universal and affordable access in a marketplace with real choices.


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