....whatever AT&T and others may claim as motives, the potential for abuse of market power is obvious to everyone. Ninety-four percent of Americans have either zero, one, or two choices for broadband access. Many of us wish things were otherwise, but they are not.I'd like to stay with that highway metaphor for a moment. After all, it's not just that AT&T wants to reserve any old lane for Ford - they're walling off the fast lane.
...It is inevitable that a discriminatory infrastructure will affect competition and innovation in the markets that depend on it. Imagine, for a moment, that private American highway companies reserved a lane for Ford cars. That would be good for Ford, but obviously would affect competition as between Ford and General Motors. It would also slow innovation--for it would no longer be the best car than wins, but the one that signs the best deals and slows down their competitors. The race is no longer to build a better car, but to fight for a better deal with the highway company.
What does this mean? Well first, it means people who drive a Honda, Kia, or Hyundai are stuck doing 55mph forever. When they get sick of that, they may decide to buy a Ford, but guess what? The price for a Focus has gone up by 30%. And people don't have a choice, unless they mind being stuck in the slow lane forever.
This is what they want the Internet to be. And for no good reason at all, except avarice.
Matt Yglesias writes:
Besides which, all this takes place in a distinctly sub-optimal environment -- we really ought to have a much faster public sector broadband infrastructure in place that would make all this irrelevant.Well yeah, that'd be nice. But which Republican-held house of Congress is going to allocate money for socialized fiber optic lines?
It's worth pointing out that, were it possible, the best way for us all to get service would in fact be for the government to nationalize the lines - copper, fiber, whatever. More than one economist has noted that telecom is a natural monopoly, and natural monopolies are generally best controlled by some public entity.