U.S. Internet Users Pay More for Slower Service – Bloomberg:

Meanwhile, the U.S. is rapidly losing the global race for high-speed connectivity, as fewer than 8 percent of households have fiber service. And almost 30 percent of the country still isn’t connected to the Internet at all.

To fix this problem, a new approach is needed.

The first step is to decide what the goal of telecommunications policy should be. Network access providers — and the FCC — are stuck on the idea that not all Americans need high-speed Internet access. The FCC’s National Broadband Plan of March 2010 suggested that the minimum appropriate speed for every American household by 2020 should be 4 megabits per second for downloads and 1 Mbps for uploads. These speeds are enough, the FCC said, to reliably send and receive e-mail, download Web pages and use simple video conferencing. The commission also said it wanted to ensure that, by 2020, at least 100 million U.S. homes have affordable access to download speeds of at least 100 Mbps and upload speeds of at least 50 Mbps.

Such rates wouldn’t be difficult. Comcast Corp. is already selling its 100-megabit service in the richest American communities, though it costs $200 a month. In a sense, the FCC adopted the cable companies’ business plan as the country’s goal. The commission’s embrace of asymmetric access — slower upload than download speeds — also serves the carriers’ interests: Only symmetric connections would allow every American to do business from home rather than use the Internet simply for high-priced entertainment.
Other countries have different goals. The South Korean government announced a plan to install 1 gigabit per second of symmetric fiber data access in every home by 2012. Hong Kong, Japan and the Netherlands are heading in the same direction. Australia plans to get 93 percent of homes and businesses connected to fiber. In the U.K., a 300 Mbps fiber-to-the-home service will be offered on a wholesale basis.

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How much would it cost to bring fiber to the homes of all Americans? Corning Inc. (GLW), the American glass manufacturer, and others have estimated that it would take between $50 billion and $90 billion.
The Internet has taken the place of the telephone as the world’s basic, general-purpose, two-way communication medium. All Americans need high-speed access, just as they need clean water, clean air and electricity. But they have allowed a naive belief in the power and beneficence of the free market to cloud their vision. As things stand, the U.S. has the worst of both worlds: no competition and no regulation.

Source: Daring Fireball