Complaints about the poor quality of customer service from big internet providers like Comcast or Time Warner are often punctuated with an exasperated variant of "I'm paying XX dollars every month, how can they get away with this?" The short answer is because they can, because in all likelihood there's no real broadband competition in your area, because cable companies like Comcast and Time Warner are strengthening their grip on broadband and aren't feeling much pressure to improve your service.
The salt in the wound is that even though you do pay quite a bit for connectivity to the internet, what you're getting in return probably isn't all that great, at least when compared to the rest of the developed world where faster, cheaper internet connections abound. But the mere adequacy of cable-delivered U.S. internet is not without its defenders. Richard Bennett of the Information Technology and Innovation Foundation (ITIF) inked an op-ed for the New York Times this weekend arguing that we're actually doing pretty OK on the cable broadband front. Bennett's arguments, however, require a little scrutiny and clarification.
First and foremost, some disclosure is needed. Between 2009 and 2011 (the most recent data available) the ITIF received nearly $100,000 from the National Cable and Telecommunications Association (NCTA), the cable industry's chief lobbying group. (The NCTA's 990 forms for the relevant years can be found here, here, and here.) Over that same time period ITIF also received $122,500 from CTIA -- The Wireless Association, which lobbies on behalf of the wireless telecommunications industry. (990s here, here, and here.) The New York Times identified Bennett as a senior fellow at ITIF but did not disclose these donations, which are relevant given his promotion of America's broadband systems, which are dominated by the cable networks, and mobile broadband development.
UPDATE: The Times has responded to Media Matters' inquiries on the financial disclosure aspects of Bennett's op-ed: "We are entirely confident that this essay was handled correctly and we do not intend to comment further on it."
In his op-ed, Bennett wrote:
But that began to change as the economy turned around. Private investment and advances in technology, brought about by a competition policy that encouraged cable and phone companies to improve their networks, have propelled America's networks forward.
Over the last three years America's broadband systems have doubled in speed, while Europe's have remained stagnant. And that will continue, because broadband companies here are installing advanced fiber-optic technology faster than Europe, and most of the world's users of the fastest mobile broadband technology, 4G/LTE, live in America.
The important thing to note here is the inclusion of phone companies and "mobile broadband technology." Yes, the United States is leading the world in deployment of 4G mobile internet, but broadband to your phone is in no way on par with, or a substitute for, a wired internet connection. It's more expensive and it's more restrictive -- monthly data caps for mobile providers like Verizon range from one gigabyte to ten gigabytes, not nearly sufficient for data-intensive online activities like streaming video. And if you go over the cap you get hit with additional fees or throttling of your connection.
As for fiber optic technology, it's prohibitively expensive -- for consumers and for service providers who actually have to lay the cables. As Ars Technica points out: "While fiber purchasing may be on the rise, that doesn't necessarily mean that retail, fiber-to-the-premises is even available, much less priced competitively in most of America." Right now, 16 states have more than 25 percent of end-users accessing the internet via wireline fiber, and many of those states are small and/or sparsely populated. Huge population centers have next to no fiber penetration: California has 15 percent, Texas has seven percent, Ohio has six percent, and Illinois has less than one percent. Cable providers like Comcast and Time Warner that already have existing networks would like nothing more than to see competitors' fiber network buildouts cease.
And, as a matter of fact, the competitors are doing just that. Verizon, which had been laying FiOS fiber optic cables to try and compete with cable companies, decided that it was easier to just give up on fiber, focus on mobile internet, and enter into cross-marketing agreements with Comcast in areas not covered by FiOS.
Bennett's op-ed was based on a report the Information Technology and Innovation Foundation put out earlier this year arguing that U.S. broadband "is better than in all but a handful of nations that have densely populated urban areas and have used government subsidies to leap-frog several generations of technology ahead of where the market would go on its own." That report drew criticism from a number of observers who claimed that the ITIF cherry-picked data and made several claims that could not be corroborated. But even if the report were entirely accurate, it's still a celebration of mediocrity and an acknowledgement that in the broadband arena, the U.S. is not in a position of global leadership.