Why Doesn't America Have $10 Broadband?

Let’s join the rest of the developed world and bring competition to the business of providing the internet to our homes and businesses...

Image by Gerd Altmann by Pixabay

Perhaps you’ve noticed there are several new phone companies offering very low-cost cell service, some for as little as $5/month. There’s competition in the cellphone space that’s driving down prices and driving up service, at least in many parts of the country.

So why isn’t the same thing happening on the internet side, with the company that brings the web into your home? Why can’t Americans in as much as half the country pick among multiple companies offering high-speed internet and get the one whose price and service best matches their needs?

Similarly, why is it that in France , for example, internet service can run as little as $15 a month and bundles — for example, 2 cell phones with 2 different numbers, free unlimited international calling, no internet data caps, unlimited high-speed broadband into your home, and hundreds of cable TV channels — are as little as $90 a month? 

Why are phone and internet service price-competitive around the world but here in America that competition is limited to cell phone service?

It didn’t used to be this way here in the USA.

For those too young to remember, as recently as the late 1990s and early 2000s you could pick from dozens of phone companies to bring phone calls into your home and from hundreds of internet service providers (ISPs), all competing for your business with low prices and great, often local service.

When Louise and I moved to Montpelier, Vermont in 1999 we selected a local company based a few blocks from us in town to provide both phone and internet service to our home. Vermont was once, briefly, a sovereign nation so this company played on that with their name: Sovernet.

The bundled package cost us $25 a month (compared with Bell Atlantic, who charged more) and when I had a problem and called their service number, a guy a few blocks away answered the phone (and twice came to our house, at no charge, to help me figure things out).

And here’s the amazing part: while Sovernet was giving Louise and me (and our radio show, started from our home in 2003) world class phone and internet service, the wires that carried them into our home were owned by Bell Atlantic (which later became Verizon).

Phone companies are regulated as what’s called “common carriers” by the FCC under Title II of the Telecommunications Act. That means they can’t charge you based on what you’re saying or with whom you’re talking. In fact, they can’t even listen in on your calls.

The content of your calls is your own damn business and nobody else’s.

While Bell Atlantic owned the “pipe” or cable carrying phone service into our home, they had to allow us to pick who we wanted to connect us to either the national telephonic system or the nation’s internet.

We picked Sovernet out of dozens of possible providers, and Sovernet then paid a small monthly fee to Bell Atlantic for access to my home through their wires.

I don’t know the math from back then, but if, to just guess at numbers, Sovernet was paying Bell Atlantic a $5/month “access fee” to use the wire coming into my home, they could use the remaining $20 of the $25/month they charged us to provide service and make a profit for themselves.

And Bell Atlantic, of course, had set their monthly access fee (or whatever it was called back then) high enough to cover the cost of maintaining the line to my home plus a small profit for themselves. Everybody won.

(But during the last years we lived in Vermont around the time of Bush’s invasion of Iraq [as I recall], their legislature gave monopoly power to the phone companies that owned the wires, locking out competitors. The result of big-money lobbying legalized by the Supreme Court, this happened in state after state across the country.)

That wide variety of competition for your business is also how it used to be in America with internet service, because it was entirely carried over telephone lines.

For a while, CompuServe was the nation’s largest internet service provider (and a business I owned moderated around 30 forums for them). Then AOL came along and, through aggressive marketing, price competition, and a great email product that endures to this day, replaced CompuServe as the nation’s number one ISP.

Soon there were literally thousands of competitors. All over common carrier phone lines. Everywhere in the country.

So, what changed? Why is it that the only “wired” internet service I can buy in my neighborhood is from one single company (this is true of large parts of America) and I therefore pretty much must use them as my internet service provider (ISP)?

In large part it’s because the companies bringing most of us the internet started out as Cable TV companies, and Cable TV was never regulated the same as phone companies. If you bought your cable from Comcast or AT&T, they were the only ones who could put a cable box/decoder in your home and become your singular source for TV programming.

One pipe into your house, one company controlling every aspect of what goes through it. And spying on you to make extra profits.

Here’s where we get back to that somewhat wonky Daily Take I wrote to you last week about calling your two senators to get Gigi Sohn on the FCC.

When Donald Trump and former Verizon lawyer Ajit Pai (who Trump elevated to chairman of the FCC) ruled that the internet was no longer regulated under common carrier rules of Title II (as it had been for a few brief years under Obama), they kept you and me locked into the company that owns the wire that comes into our house. We have no choice.

Every ISP in the nation can now watch and record every single website you visit (even in “Private Mode”), track how long you’re there, and record every message you send or receive. They can sell this information to anybody they choose and data brokerages have become a billion-dollar business, as I laid out in my book on Big Brother.

And there’s no way for you to ever find out what they’ve recorded or what they’ve done with it because they simply refuse to make that information available, unless or until a government agency serves them with a subpoena and it ends up being used against you in court.

Your phone company can’t listen into your phone calls because wiretapping is illegal, giving you privacy protections dating back to the 1930s. But that’s not true with your internet provider, thanks in part to Trump, Pai, and the GOP.

And those companies are fighting like hell to keep it that way.

Monopolies are cash cows, as I laid out in The Hidden History of Monopolies: How Big Business Destroyed the American Dream. And ISPs are among the most profitable monopolies in the nation.

In most of the rest of the developed world that’s illegal — whoever owns the cable into your home can charge an ISP an access fee but can’t block them out — which is why internet service in most other developed countries is competitive, with hundreds of providers. And, with that competition comes lower prices and better service.

President Biden’s choice for the open slot on the FCC, Gigi Sohn, is on record wanting Net Neutrality, which could result in ISPs being redefined back to being common carriers.  So are the two sitting Democratic FCC commissioners.  But they are blocked by the two Republicans, who oppose Net Neutrality. 

Which is why the big ISPs are throwing millions every day at Congress right now to block her confirmation by the Senate, and keep the Democrats from gaining a majority at the FCC, something that previous administrations easily attained.

Let’s join the rest of the developed world and bring competition to the business of providing the internet to our homes and businesses. And get them out of the business of spying on our every online action just to make an extra buck.

Call your two senators at 202-224-3121 and ask them to approve Gigi Sohn for FCC Commissioner during this final lame duck session of Congress.

(Special thanks to my friend, fellow tech geek, and colleague on the board of the Oregon Raindrop Fund, John Schwartz, for his quick fact-check of this article’s first draft.)