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As the new Millennium began, America led the world in adoption of Internet access; ten years later we'd fallen far behind most industrialized nations in terms of speed and prices charged. Most Americans receive Internet via slow copper wires, and nearly 30% aren't connected at all. Only 7% of Americans are connected to optical fiber, vs. nearly half for South Korea, Japan, and Hong Kong; meanwhile, our service costs about 6X that in Hong Kong and 5X that in Stockholm. Crawford's book tells the story of how the Comcast-NBCU merger occurred (paid $13.8 billion), helping this oligopoly situation.
Comcast is the communications equivalent of Standard Oil in the Rockefeller era. Even before its merger with NBC Universal it was the nation's largest cable operator and the owner of many cable content properties - including 11 regional sports networks. It had almost 16 million subscribers. NBC Universal owned some of the most popular cable networks and one of the largest broadcast networks. The merged company would control 20% of all television viewing in the U.S. Mobile wireless is too slow to compete.
A similar situation happened in the 1880s when 15 holding companies controlled 85% of electricity distribution, and the FTC found they routinely gouged consumers. In response, thousands of communities formed their own electrical utilities, more than 2,000 U.S. communities such as L.A., San Antonio, and Seattle, provide their own power, and electricity is a regulated public utility. Only a few cities provide their own Internet service (eg. Chattanooga, TN and Lafayette, LA) , there's no regulation of Internet rates and service, and the leaders reap 95% profit rates.
New entrant Google is now offering 700 MB service in Kansas City for $70/month, Comcast sells 100-megabit service for $200/month. Using a standard cable connection, backing up 5 GB of data takes 90 minutes; with a gigabyte connection, it can be done in less than a minute. Cable wire is 20X faster than 4G wireless. With a fully fiber-based network video conferencing would become routine and every household could see 3D and Super HD images. Bringing fiber to all Americans would cost an estimated $50 - $90 billion, per Corning Glass.
Bottom-Line: American homes and businesses are being gouged by an oligopoly of Internet providers.
January 2013 · Books