Unbundling Is Overdue
The FCC’s recent stance on Net Neutrality is nice and all, but one critical elements is still missing: unbundling, which requires carriers that own infrastructure to lease their last-mile connections with competing services at low, regulated rates. You might think that it’s unfair to force companies to share private resources, but (1) these resources are built on public land, and (2) were heavily subsidized by federal, state, and local governments—i.e., you, the taxpayer. They may own it, but you mostly paid for it.
This egregious sop to the telecoms largely goes unnoticed, but the lack of bundling more or less prevents meaningful competition, thus causing higher prices and slower service. Unbundling in Japan and Europe has created healthy competition and far superior service. For example, I get fiber-optic FTTH Gigabit service at home, which includes telephone service (we could add TV for a nominal fee if we wanted) and my monthly bill is less than $60. Plus we get $150 – $300 per year off our two cell phone contracts for using the same carrier for both. $30 a month can get you 100 Mbps service.
In the U.S., how many choices do you get for Internet service? In Japan, it’s not uncommon to have your choice of half a dozen providers offering various deals and packages when you go to any electronics store and visit the carrier counter.
My Computer students are always shocked to hear that Internet service in the U.S. is slower and more expensive than in Japan. Yes, some of it is due to the U.S. being a larger country, but the lack of strong government incentives, too little regulation, or any kind of comprehensive national policy to promote a healthy market are far more responsible for the shoddy product so many Americans suffer with nowadays.
Even more than that was is needed is busting up the cable box.
Some time this century the “TV channel” will die. My mom is paying $100/mo because she wants Turner Classic Movies and CNN, and $100 is the price you pay for the middle tier that has both.
Comcast has a market cap of $140B — almost pocket change for Apple given their $80B/yr positive cash flow — so Apple might just have to buy them or something, to complete their takeover of the world.