The Disharmony Between Wall Street, Giant Conglomerates and Internet Service Speed

License: Creative Commons image source

License: Creative Commons image source

In January of this year, Hong Kong was announced as having the fastest internet service in the world at just more than 54 megabits per second, according to Akamai Technologies. Trends show that these numbers are only going to continue to soar if history has anything to show us. If you thought the United States is in the running at all, however, you’ll be surprised to learn that the “leader of the free world” was nowhere close to being in the running. The top connection speeds went to Hong Kong, South Korea, Japan, Latvia, and Romania. That’s right. Latvia and Romania won out over the United States, which ranked 14th at an average of 29.6 Mbps. “We are at risk in the global race for leadership in innovation,” FCC chairman Julius Genachowski said. “Consumers in Japan and France are paying less for broadband and getting faster connections. We’ve got work to do.” But why is the United States so low on the internet speed totem pole?

Wall Street Doesn’t Encourage Infrastructure

Wall Street’s system tends to encourage short-term investments over long-term investments. As a result, infrastructure is rarely a supported investment on Wall Street. Because the United States is forced to work with existing infrastructure, internet speeds stay slow. While internet speeds have steadily improved in the last ten years, the U.S. ranks 14th in internet speed in the world.

Giant Conglomerates Rig Rules

Bill Moyer’s theory on why the United States has such low-speed internet is that conglomerates hurt competition: “We’re stuck with…old fashioned technology,” Moyers claims, “because, as Susan Crawford explains, our government has allowed a few giant conglomerates to rig the rules, raise prices and stifle competition. Just like Standard Oil in the first Gilded Age a century ago.” Crawford, author of “Captive Audience,” argues that companies such as Comcast have too much control over the telecommunications market which gouges American consumers and hands them an inferior product while the rest of the world goes faster and faster. The lack of competition from smaller companies is a huge problem. While Americans choose between two or three large companies, they are basically making it so that no one has to work hard to get us a better product. In fact, both Verizon and AT&T refused to take subsidies from the FCC in order to increase rural service because they didn’t want to take orders from the FCC.

What Analysts Suggest Should Happen

Analysts such as Crawford suggest the solution to our slow internet problem needs to be addressed by the government. Though Congress created the FCC to make communication modes available to “all the people of the United States” a “rapid, efficient, nationwide communication service at reasonable charges,” Crawford suggests this goal has not been met. She argues that if private providers won’t provide affordable communication service, the local and federal government needs to step in.

The United States’ low internet speeds and high costs show that businesses need to be revised in order to place the U.S. closer to the top where it likes to be.

About the Author: Jena Daniels is a blogger for Pepperdine University promoting their online MBA programs.

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