As recently as 2001, the percentage of the population with high-speed access in Japan and Germany was only half that in the United States. In France it was less than a quarter. By the end of 2006, however, all three countries had more broadband subscribers per 100 people than we did.Yeah, but have the French ever come up with a really good car?
Even more striking is the fact that our “high speed” connections are painfully slow by other countries’ standards. According to the Information Technology and Innovation Foundation, French broadband connections are, on average, more than three times as fast as ours. Japanese connections are a dozen times faster. Oh, and access is much cheaper in both countries than it is here.
As a result, we’re lagging in new applications of the Internet that depend on high speed. France leads the world in the number of subscribers to Internet TV; the United States isn’t even in the top 10.
What happened to America’s Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot — or was persuaded by special interests to ignore — the reality that sometimes you can’t have effective market competition without effective regulation.
You see, the world may look flat once you’re in cyberspace — but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.
America’s Internet flourished in the dial-up era because federal regulators didn’t let that happen — they forced local phone companies to act as common carriers, allowing competing service providers to use their lines. Clinton administration officials, including Al Gore and Reed Hundt, the chairman of the Federal Communications Commission, tried to ensure that this open competition would continue — but the telecommunications giants sabotaged their efforts, while The Wall Street Journal’s editorial page ridiculed them as people with the minds of French bureaucrats.
And when the Bush administration put Michael Powell in charge of the F.C.C., the digital robber barons were basically set free to do whatever they liked. As a result, there’s little competition in U.S. broadband — if you’re lucky, you have a choice between the services offered by the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there’s nowhere else to go.
Meanwhile, as a recent article in Business Week explains, the real French bureaucrats used judicious regulation to promote competition. As a result, French consumers get to choose from a variety of service providers who offer reasonably priced Internet access that’s much faster than anything I can get, and comes with free voice calls, TV and Wi-Fi.
The Wall Street Journal's idea is that unfettered free enterprise is the best thing...as long as they get to be the ones who are unfettered. It may not occur to them -- or worse, perhaps it does -- that the reason some industries like utilities, insurance, securities, and banking are regulated within an inch of their lives is that in the past those enterprises have proven to be notorious for ripping people off or becoming overbearing monopolies. A little regulation effectively applied can be a boon to both the industry and the public.
It's also an ironic contrast in terms of philosophy. The most conservative business types are all for the most of liberal ideas -- do your own thing, let it all hang out, go for the gusto -- when it comes to business and as long as they can get rich, yet they're adamantly opposed to those values when it comes to social policy such as freedom of reproductive choice or sex, drugs, and rock and roll. And many liberals are just as eager to apply the strictest restrictions to rampaging capitalists.
Somewhere in between there will come a compromise of free enterprise and regulation -- perhaps based on the French model -- where they'll come up with the fastest way to download porn.
