Seattle's Chief Geek: Broadband Monopoly Keeps Costs Too High

Bill Schrier, Seattle's Chief Technology Officer (informally, Chief Geek), recently explored the ways in which limited competition in broadband has kept prices too high for many Americans and suggests high prices should be a cause for concern on the level of network neutrality. He is right not only in noting the problem, but noting that there is no solution to it forthcoming from the states or feds. However, communities can take control of broadband prices by building their own networks. Not only can they guarantee lower rates, they effectively force lower rates from incumbents (and often increased investment) by merely increasing local competition. Due to limits in law and FCC policy, building a network is really the only power of local governments to ensure the community has the broadband access it needs to succeed. I have long found it amazing that local governments have the power to set a limit on the lowest tier of cable TV prices but no ability to require a basic tier of Internet. What is more important to communities? Cable TV or broadband?

The City of Seattle – and other cities and counties – can regulate cable TV to a limited extent. Therefore we can demand cable companies provide a low cost basic service – $12.55 in Seattle for Comcast, for example, and there’s even a discount to that low rate for low-income residents – more details here. The State of Washington – and other States – can regulate telephone service, and require telephone companies to provide a low cost basic phone rate, e.g. $8 a month for 167,000 households. But NO ONE regulates broadband/Internet access. Consequently ISPs can charge whatever the market will bear. So in our present monopoly or duopoly environment throughout the nation – that is little choice for most of us – prices are at $30, $40 or more for even moderate speed access. Higher speed access is $100 or more. And that means low-income, immigrant, seniors and other households cannot afford access to the Internet. So they and their children are denied what is probably the most important pathway to education, information, jobs and higher income – access to the Internet. Even middle income households or neighborhood businesses cannot get affordable truly fast (e.g. 5 megabits per second symmetric) broadband.

Bill's post is well-linked and worth reading in its entirety. We continue to follow Seattle's consideration of publicly owned broadband network. Photo used under creative commons license from flickr.