The biggest casualty of America’s phone monopoly is its competitive position in the world.
Not only have the monopolists systematically retreated from international investments, but now European companies are starting to invade our market. We should root for them because they’re the only bulwark we have against the need for net neutrality legislation.
With ample competition there would be no need for net neutrality legislation. The very fact we have to fight for it is proof that true competition does not exist.
Fortunately we are starting to see some. An outfit called 1and1, from Germany, recently completed a fiber ring around Lenaxa Kansas in order to serve its Web hosting operations there. The investment means the German company bypasses AT&T control over local networks, and it can reach competitive fiber so its costs remain low.
This does not solve the whole problem, which is based on the
stranglehold AT&T and Comcast have over "last mile" services, and
their greedy destruction of American cellular competitiveness, based on
their demand that they be paid whenever a bit or a dollar passes on to
"their" customers.
It must also be admitted that 1&1 doesn’t make everyone happy. Here is one story. Here is another.
But this could be just the start of something very important. The
last-mile monopoly profits of the incumbents, combined with the
laziness inherent in holding a monopoly, guarantees new entrants an
opportunity for profit, if they merely invest. The retreat of the
monopolists from their foreign investments guarantees that new
competitors will emerge there.
The market lesson American companies taught their European
competitors in the last decade, about the need for a competitive
market, will be retaught to us by the Europeans. And if this move can
be encouraged through public policy that is, at worst, non-Xenophobic,
we can have more choices, lower prices, and faster services within a
very few years.
Supporters of a faster, cheaper, more competitive Internet can be very proud of the work done in the 1990s, which tried to open up the U.S. Internet market to competition. The Bush people stamped that out here, but it took root elsewhere, and that root stock will soon return.
