Why is U.S. internet speed lagging behind other countries? We’ve seen it time and time again within one industry after another. In our capitalistic society when private industry is faced with doing what is best for society or what’s best for the bottom line, they will choose margin over mission most every time.
However, it’s nearly impossible for it to take place without the assistance of government regulators. As opposed to restricting monopolies and ensuring that industry is using its ingenuity to move our country forward, they participate in writing regulations or ignoring existing policies allowing companies within industry to form alliances or cartels limiting competition and allowing them to fix prices on consumers, and to prevent competition from other companies. This impedes progress and technological advances.
The United States has been known for leading technological advances in internet and communications. Japan did an incredible job elevating innovations and kept raising the bar for the industry to achieve higher advances.
However, as economies of scale drive companies to acquire other leading companies forming a concentration of power at the top, their ability to dictate prices and terms takes precedent over innovation.
These corporate cartels have a price that most economists don’t factor into their analysis when assessing our economy. These costs are consumers paying more for products and services while receiving less.
Last week Bill Moyers talked with author Susan Crawford who wrote Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age. From this short interview, you get the idea that the telecom industry is operated by yet another cartel.
As Bill states,
Americans are paying much more for internet access than people in many other countries and getting much less in return. That, despite the fact that our very own academics and engineers, working with our very own Defense Department, invented the internet in the first place.
We should be leading the globe with our technological supremacy, but instead, our lust for money has corporations rigging the game for profits while our government condones, and even participates in the activities, while consumers pay more for less. This is contrary to what the current free market indicates will happen to industry when government does not intervene. Their repeated claims are “Competition will ensure that markets receive the best for less.”
However, when business collude with one another, this is not the case.
As Bill points out, “Now many other countries offer their citizens faster and cheaper access than we do.” As opposed to the market seeing faster high-speed access through fiber optic lines, many of us are still hooked up to broadband. We’re stuck with this old-fashioned technology because, as Susan Crawford explains, our government has allowed a few giant conglomerates to rig the rules, raise prices, and stifle competition.
Watch the interview with Susan Crawford. It reveals yet another industry where profits are up, yet America is floundering in due to larger, less innovative companies who have been allowed to form cartels to protect themselves from competition while consumers pay the ultimate price – it seems like a recurring theme. These methods and business practices are not sustainable.