Big Telecom Is Suppressing Your Access To Fast Fiber Internet Service
A recent report by the Federal Communications Commission (FCC) stated that 24.7 million Americans do not have access to broadband internet. Why are so many Americans without high speed internet in 2019, and why are they often presented with only one choice for a provider? According to Professor Susan P. Crawford of Yale University, large telecommunication companies are purposely withholding high speed internet from consumers.
Professor Crawford spoke with the Salon about the telecom industry and its potentially negative impact on the future of high speed internet. She remarked that there is simply not enough fiber to provide 5G coverage to all Americans. She blames the current situation on deregulation and oligopolistic market practices.
Crawford noted that Michael Powell, a former FCC Chairman, massively deregulated the telecom industry in 2004. He believed that telecom companies would “battle it out” and that the competition would provide inexpensive and fast Internet for Americans. Instead, a single telecom company can now typically control an entire geographic area. The infrastructure is incredibly expensive to build and smaller companies struggle to fund such large projects. Large telecom companies can therefore increase prices without fear of competition. These companies also typically focus on urban areas to make more money and ignore rural areas.
Telecom companies have also employed vertical integration, or the combination of two or more stages of production in one company. For example, AT&T is not just one of the largest mobile internet providers in the world, but it also owns companies like HBO and Warner Bros. AT&T provides both coverage and content. If a smaller company threatens AT&T’s coverage, AT&T can simply increase the price of their content or charge more for coverage in isolated areas.
This behavior was recently demonstrated with AT&T's purchase of Time Warner, and its own TV subscription streaming service DirecTV Now. AT&T promised to reduce prices, but instead eliminated existing streaming bundles and charged more for new ones. After some time had passed, it brought back the older bundles at higher prices. AT&T lost a number of subscribers, but made up the difference by increasing the prices of its content. There are now several class action lawsuits against AT&T over this issue.
Professor Crawford does not provide a plan of action, but she hopes that her research will bring more attention to the issue. President Trump recently tweeted that he wants, “...5G, and even 6G, technology in the United States as soon as possible...American companies must step up their efforts, or get left behind. There is no reason that we should be lagging behind on.” Crawford believes that only greater regulation can make this dream a reality.
Professor Crawford spoke with the Salon about the telecom industry and its potentially negative impact on the future of high speed internet. She remarked that there is simply not enough fiber to provide 5G coverage to all Americans. She blames the current situation on deregulation and oligopolistic market practices.
Crawford noted that Michael Powell, a former FCC Chairman, massively deregulated the telecom industry in 2004. He believed that telecom companies would “battle it out” and that the competition would provide inexpensive and fast Internet for Americans. Instead, a single telecom company can now typically control an entire geographic area. The infrastructure is incredibly expensive to build and smaller companies struggle to fund such large projects. Large telecom companies can therefore increase prices without fear of competition. These companies also typically focus on urban areas to make more money and ignore rural areas.
Telecom companies have also employed vertical integration, or the combination of two or more stages of production in one company. For example, AT&T is not just one of the largest mobile internet providers in the world, but it also owns companies like HBO and Warner Bros. AT&T provides both coverage and content. If a smaller company threatens AT&T’s coverage, AT&T can simply increase the price of their content or charge more for coverage in isolated areas.
This behavior was recently demonstrated with AT&T's purchase of Time Warner, and its own TV subscription streaming service DirecTV Now. AT&T promised to reduce prices, but instead eliminated existing streaming bundles and charged more for new ones. After some time had passed, it brought back the older bundles at higher prices. AT&T lost a number of subscribers, but made up the difference by increasing the prices of its content. There are now several class action lawsuits against AT&T over this issue.
Professor Crawford does not provide a plan of action, but she hopes that her research will bring more attention to the issue. President Trump recently tweeted that he wants, “...5G, and even 6G, technology in the United States as soon as possible...American companies must step up their efforts, or get left behind. There is no reason that we should be lagging behind on.” Crawford believes that only greater regulation can make this dream a reality.
