Market failure OTD: Comcast bandwidth
Advocates of a completely unregulated broadband ISP market argue that left to its own devices, ISPs will offer the array of products to consumers that best fit consumers' needs at the optimal price points.
Yet for millions of people who live in Comcast's service area, there is only one choice for fast Internet - Comcast. And Comcast gives customers two choices: residential cable Internet for around $60/month, or business Internet for $1500/month. But residential cable has a secret bandwidth limit, and as Consumer Affairs reports, if customers exceed the limit, Comcast cuts them off. Want to pay more for twice the download capacity, like you can on with cell phone minutes? Too bad, no.
Nevertheless, the U.S. Department of Justice believes that everything is peachy keen in Internet land. Art Brodsky of Public Knowledge debunks the DOJ, comparing the range of broadband Internet choices in the U.S. (for most people, that's just one, and for lucky people, two) with the huge array in the UK. The Consumerist arranges it into a nice side by side comparison chart.
Why can't we have a real market with real competition, instead of ideologues like those at the DOJ using "free market" rhetoric to actually stifle the development of an actual free market? Sounds like the people at the DOJ didn't get past the first chapter in their economics textbooks, to the part where it explains how barriers to entry are one of the primary impediments to a healthy market.
3 Comments:
I keep hearing about how many different competitive options users have in Europe, but I've yet to see a comparison between the U.S. options and the options for a country with comparable geography. Broadband Internet access requires expensive physical infrastructure, which is not trivial to build out over a wide area. All of England would fit in lake Ontario.
Where's the comparison to options in Canada, Russia, China, or even India? Or at least an explanation as to why the vastly different geography doesn't matter.
That is a good point about geography. Another interesting point is that in at least two of the countries, Canada and England, the amount of data is limited per month. Thankfully, the U.S. has not started this stipulation as well. But I do look for it to begin eventually.
wyatt: It's already begun... the difference is that the US companies simply don't tell you what the limit is, and will simply cut you off when you exceed it. So much for "unlimited".
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