Monday, October 28, 2013

Internet have's, Internet have-not's

Home broadband in the US costs far more than elsewhere. At high speeds, it costs nearly three times as much as in the UK and France, and more than five times as much as in South Korea. Why?....
For Susan Crawford, author of Captive Audience, higher prices have created a digital divide which excludes poor Americans from quality internet access. And there are economic implications too.
"The 2008 banking crisis demonstrated what happens when we allow banks to act out of pure self interest. The communications crisis in America is less visible but also destructive of America's ability to function on the global stage."
Companies may assert that high prices insure ever-improving service and that regulation would cut into that service. More likely, I suspect, is that regulation would cut into profits. But if a 20% profit (to take a speculative number) nourishes what can be sold as a guarantor of improvements, would companies actually reduce their efforts to improve when the profit margin were only 10%? Ten percent is a pretty good margin and perhaps the nation might benefit.

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