Broadband Service Better, Faster in Japan - Broadband in the US: What Happened?
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So what happened to broadband in the US to make it less competitive? One of the differences is that our regulators did not – quite -- force phone and cable companies to open their lines to upstart Internet providers. Oh, the lines were opened, but something happened on the way to the market.
The relevant section of the Telecommunications Act of 1996, Section 251(3)(2)(B), forced local telephone companies to share their lines with competitors at regulated rates if “the failure to provide access to such network elements would impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to offer.” They did comply with the law, but there may have been some unforeseen consequences.
According to Robert X. Cringely, who worked in the tech industry in the 1990s and now reports on it, the Act wasn’t a total failure at the Federal level, but it was at the state level. “All 50 U.S. states and the District of Columbia contracted with their local telecommunication utilities for the build-out of fiber and hybrid fiber-coax networks intended to bring bidirectional digital video service to millions of homes by the year 2000. The Telecom Act set the mandate but, as it works with phone companies, the details were left to the states. Fifty-one plans were laid and 51 plans failed.”
How is this possible? Cringely attributes it to a number of factors. He starts by pointing to technical problems. “Bidirectional 45-megabit-per-second service was going to be harder to install and more expensive than expected,” he pointed out. There were also regulatory problems; the FCC tried to control things centrally while the states saw the roll out as “just another cable company to be taxed and regulated.” And then there was the issue of greed, which could – and did – fill a book. In this case, it’s a 406-page e-book about the industry that Cringely links to in his article. But one has to consider how much incentive many of these companies may have had to significantly build out their infrastructure with newer, faster, better connections if they would be forced to make them available to their competition.
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