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Law in the Internet Society
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Paper Title-- By AvelinaBurbridge - 03 Feb 2013IntroductionReflecting on this course, a dominant theme seems to be the use of the Internet to achieve freedom. An important initial requirement is ensuring that all people have access to the Internet. However, some Americans do not have access to broadband and others cannot afford it. Current Internet service provider (“ISP”) giants prefer that people perceive broadband to be a luxury good so that they may continue to control the distribution of Internet service and extract rents in the process. Lobbying to support their interests has largely proven effective in maintaining control. However, other companies whose interests favor expanding broadband access may influence change in broadband markets on a regional or national level.The Problem with the Current Broadband MarketThe national market for broadband service is controlled by the cable industry. In most regions, however, there is a single cable provider that also has a monopoly as the ISP for the area. The ISPs provide broadband service in return for fees, which are usage-based. As National Cable and Telecommunications Association president Michael Powell concedes, the pricing structure is not a reflection of issues in network congestion. Rather, Powell claims that the ISPs are concerned with recouping the fixed cost involved in building the infrastructure. While the ISPs’ behavior is enabled by high fixed costs, it is not justified by those costs. The expense of constructing a network acts as a barrier to entry that protects the current ISPs from competition. As cable and utility providers, the current ISPs did not have to make the sizable investment in infrastructure that an incoming competitor would have to, since they largely were able to leverage their existing infrastructure to accommodate Internet service. Further, earnings reports from the ISP giants, including Comcast and Time Warner Cable, suggest that they have long since recouped the cost of their initial investment. Yet, without competition, the ISPs are not motivated to reduce prices to reflect the true costs of continuing to provide broadband, leaving poor Americans unable to afford broadband service. Moreover, because the ISPs already service customers whose demand for broadband is high and who are able to afford the high fees for consumption, there is a diminished incentive to expand the infrastructure to reach remote Americans.Government Regulation as a SolutionTreating broadband service as a public utility has been suggested as a solution to the problem. Such a solution would require federal legislators and regulators to take action against the traditional ISPs. Traditional ISPs have a very successful history spending millions of dollars lobbying to maintain control of the industry on their terms. Rather than regulating the ISPs to foster competition, the government treats them like natural monopolies. Further, government regulators’ actions, such as the approval of a joint-marketing deal between Verizon and a group of cable companies, stifle competition in broadband markets. Based on these patterns of behavior, it is unlikely that the government will spryly issue a mandate that is disfavored by the traditional ISPs. However, should the traditional ISPs lose their stronghold on the broadband market, regulators may be more likely to give way to change.Non-Traditional ISPs as a SolutionCompanies not traditionally in the ISP business may be enticed to enter if widespread, low-cost, enhanced Internet access would improve their core business. Google, whose core business is selling advertising space, benefits when Internet access improves. Getting paid per click, Google profits from more people being on the Internet more often. The better Google is able to customize the ads to its users by observing their behavior online, the more profitable it is. Thus, Google’s interests are best served by having everybody perpetually online, using the Internet at top speeds. Acting in its own best interest, Google created Google Fiber in an initiative to make broadband more affordable. Currently only available in their pilot market, Kansas City, Google Fiber provides broadband at today’s average speeds for a one-time construction fee of $300, to cover its fixed costs, and no monthly cost thereafter. Alternatively, it offers gigabit service for $70/month, a fraction of the cost that other ISPs charge for inferior service. In response to Google’s announcement to become a Kansas City ISP, Time Warner Cable began reducing the prices it charges for broadband and increasing the bandwidth so that it can stay competitive. More, telecommunications companies in the area began competing with Google to outfit the community with fiber optic hardware. In six other communities, GigaBit? Squared, a broadband Internet startup, is working to provide access to improved broadband for the benefit of innovative providers of health care and education services.ConclusionIf the Internet is to be a tool of freedom, it must be available to all people. Although dominant players in the broadband market prefer market monopolies, which allow them to control and profit from the market, other industries are applying pressure on the traditional ISPs to provide enhanced service at affordable rates. As non-traditional ISPs find it profitable to enter the broadband market, the dominant players are forced to compete. Hopefully, as more markets are infiltrated by non-traditional ISPs, the way will be paved for all levels of government to foster expansion of affordable broadband service to all Americans.You are entitled to restrict access to your paper if you want to. But we all derive immense benefit from reading one another's work, and I hope you won't feel the need unless the subject matter is personal and its disclosure would be harmful or undesirable. To restrict access to your paper simply delete the "#" character on the next two lines:
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