The NPR radio show
had an in-depth discussion this evening of the lagging adoption of broadband in the U.S., which is certainly increasing but not at a rate matching advanced Asian economies. One caller raised a formalistic and rigid version of standard free-market economic arguments: if there is slow growth in broadband, it must be because there aren’t that many people who want it. Where, he asked, is the demand?
In a situation like this where oligopolies in the local loop use political and market muscle to hold back competition, one has to look for other signs of the need. For instance, the rural areas of this country are emptying out. Even many cities are doing poorly as population piles up in a few megalopoli, particularly along the coasts.
This has all kinds of negative social ramifications: a crisis in affordable housing, increasing ecological damage and traffic snarls, exposure to flooding, and so on.
Basically, people are leaving the rural areas and the middle of the country because they can’t get jobs. They also find themselves disadvantaged when it comes to educational opportunities and other amenities. High-speed Internet access, with opportunities for telecommuting, distance education, medical videoconferencing, and other modern applications, can help restore a healthy balance to the country.
In short, demand is masked by flight.
The show was quite valuable in its discussion of the suppression of competition in last-mile access. The baby Bells squashed the hundreds of small Internet providers that tried to get a foothold in local markets in the 1990s and then told the FCC (with the desired results) that competition would be aided by having less competition–that is, that the FCC should let the Bells and cable companies duke it out without harrassment from small innovators.
Now, as mentioned on the radio show, the telecom companies and cable companies are using the same argument to hold back municipal networks: supposedly, holding back competition is good for competition. The irony is that municipalities step in to take on the big job of building out a network only when the private companies have stayed away. And a government-run fiber network can lay the groundwork for competition at higher layers.
Let’s have some real competition, and then the hidden demand will reveal itself.