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WDEL Blog: Allan Loudell

U.S. falls behind other countries for high-speed Internet service.... More evidence of declining U.S. infrastructure?

You might have caught one or more of the stories about the United States - the country that invented the Internet - falling behind many other industrialized countries when it comes to availability of high-speed broadband service to both businesses and consumers. Compounding the indignity, we pay more for the privilege.

What is it about the United States? Time and time again, we suffer declining infrastructure, yet seem to pay more for it. Yet another disconnect between Wall Street and Main Street.

A story from The NEW YORK TIMES established the contrast:

"San Antonio, the seventh-largest city in the United States, is a progressive and economically vibrant metropolis of 1.4 million people sprawled across south-central Texas. But the speed of its Internet service is no match for that in the Latvian capital, Riga, a city of 700,000 on the Baltic Sea.

Riga's average Internet speed is at least two-and-a-half times that of San Antonio's, according to Ookla, a research firm that measures broadband speeds. In other words, downloading a two-hour, high-definition movie takes, on average, 35 minutes in San Antonio and 13 in Riga.

And the cost of Riga's service is about one-fourth of San Antonio's..."

There you have it. Am I jumping the gun when I assume SOMEONE is making a great profit, and average Americans are getting screwed?

In fairness, the United States is a vast country compared to Latvia or many of the other countries which rank ahead. And the Northeastern corridor of the U.S. enjoys some of the fastest Internet service. According to that NYT article, Washington D.C., Massachusetts, and Virginia get average speeds greater than every other nation EXCEPT for Japan and South Korea. Certain U.S. cities would rank very well against countries.

But as Tim Fernholz notes in QUARTZ, the digital business medium from The ATLANTIC:

"Perhaps the biggest difference between the U.S. and other countries is subsidies. South Korea, another economy whose Internet infrastructure and wired population often bests the U.S., has made lowering the cost of Internet access a national priority; for example, some of the cost of Internet for the low-income population is covered. That would be a hard sell in the U.S. where the idea of subsidizing health-care for the poor is controversial..."

Tim Fernholz at QUARTZ does put all this in perspective...


http://qz.com/162250/why-the-us-isnt-the-world-leader-in-speedy-internet-access/


You can hear my interview with Tim Fernholz...


Audio Here


Here's the original story from The NEW YORK TIMES:


http://www.nytimes.com/2013/12/30/technology/us-struggling-to-keep-pace-in-broadband-service.html?_r=0




Posted at 8:30am on December 31, 2013 by Allan Loudell

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Comments on this post:

billsmith
Tue, Dec 31, 2013 9:20am
Actually, more evidence of corporate greed. It's cheaper and more profitable this way and the telecom industry is regulated for the benefit of providers, not users.

mrpizza
Tue, Dec 31, 2013 9:42pm
Didn't Al Gore invent the internet?

Mike from Delaware
Wed, Jan 1, 2014 10:09am
The internet isn't like the highways and bridges we drive. Those are owned and controlled by the government and yes those falling into disrepair is the state and federal government's fault.

The internet is more like the electricity we get from DP&L. Both the internet and electrical infrastructures are owned by private enterprise. So IF we're lagging behind other nations in terms of the internet, it's not the government's fault, but would appear to be the corporations that control the internet in the U.S.; just as apparently, our electrical grid that may no longer be sufficient to meet customers' needs is also not the government's fault, but that of the electric providers. Just another example of "Trickle Down Economics" not working. Those corporations are pocketing all the profits and re-investing less than they should to keep up their infrastructure. Then when it gets bad enough, they'll talk the government into fixing it, so we the taxpayers get to pay.

kavips
Wed, Jan 1, 2014 11:12am
Allan, anyone who has run a commercial operation will tell you that there is a sliding scale, after all mandatory costs have been paid, as to how much you want to keep and how much you want to reinvest in your business. Every business owner makes a decision regarding that scale.

In America, pushing the profit line takes a higher priority over reinvestment. The examples are all over our society. In other nations, it is not so much.

Our lack of reinvestment is aggravated each time we cut taxes. Since the Bush Tax Cuts, the amount of money reinvested back in businesses has plummeted. The reason is simple. With low taxes, one gets to keep more of what one earns. When taxes take a sharper bite out of one's earnings, one tends to under-report one's profit, and reinvest a bigger portion of money left-over, back into their business as a cost....

In fact, I would wager and there are many Republican think tanks supporting this, that raising tax rates would not bring one more dime into the Treasury. But increasing the government's take is not the point. What it would do, would be to cause the shift inside the corporate structure in making internal decisions as to what to do with this money... If you want to keep your money, you reinvest it in your business.... You improve.

Think of it this way. Imagine if you could write off redoing your house's roof fully against your owed taxes? Which choice would you make?

Here are the Latvian tax rates...

http://www.taxrates.cc/html/latvia-tax-rates.html

Perhaps if the USA's rates were comparable, we too could now be enjoying a higher quality of life....

I'll finish with one old Delawarean's observation.... Back in the 50's, 60's, and 70's, every year between December 15th and Christmas, contracts just flew out of the doors of 1007 N. Market Street...

mrpizza
Wed, Jan 1, 2014 12:10pm
The internet isn't doing as badly as you think. It's presently owned and operated by Amazon.com, which may now be bigger than GM, Chrysler, and Ford combined. It also looks like the post office is sharing in that wealth:

http://www.businessweek.com/articles/2013-12-30/an-unlikely-star-of-the-holiday-shipping-season-the-u-dot-s-dot-postal-service

Obama and his henchmen can now save their bailouts for the health insurance companies who will be needing them in the near future once his health care scheme finishes imploding.


JimH
Wed, Jan 1, 2014 12:49pm
Actually, the government is at fault, in a way. Electrical rates, telephone rates, water and cable tv are regulated by the public service commission in the states. The internet is now a requirement for our lives. Therefore, the prices should be under the control of the PSC.

mrpizza
Wed, Jan 1, 2014 1:08pm
By the way, Al Gore also invented global warming, and has done quite well financially exploiting his invention.

Mike from Delaware
Wed, Jan 1, 2014 4:18pm
JimH: Good point.

kavips
Thu, Jan 2, 2014 1:13am
Regulating the Internet is a little trickier. It is like free speech. In fact, today as in most days, I did 20 times more communication over the internet, than I do face to face or voice to voice...

And my telephone and TV are now carried by the Internet. So when you impact the Internet, it is as if you impacted what I can and can't say...

However that said, both Comcast and Verizon are subject to the rulings by the PSC.

As a plus, in my research, I came across this. One cannot be reminded enough about these matters, so I thought as a public service, I'd repeat it...

CONSUMER ALERT

The Delaware Public Service Commission has been advised of a growing telephone scam affecting utility customers across the country. Scammers claiming to represent utility companies are asking for PayPal or other online payments to avoid disconnection. Visit the Federal Trade Commission's website for more information. Delmarva Power also encourages customers to take certain precautions.


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