Implications of monopolies (Telecom)

I have been looking at the telecom sector (purely from the policy perspective) and there a a range of ideas. While the American system stands out as an example of “extreme capitalisation” gone wrong and there is enough clamour to sort out the system of it s ills but it goes well for most of the countries across the world. The high cost of access.

Here’s an interesting thought from HBR:

The United States’ most serious tech problem is that half of Americans struggle to reliably get online at all. At a moment when nine out of 10 Americans say internet access is essential, according to a Pew research study, this is a devastating divide. Work, school, health care, socializing, and, often, shopping for essentials have largely moved online, which means the absence of a reliable digital connection can prove ruinous.

If I am among the 162 million Americans without access to a decent internet connection — with download speeds of at least 25 megabits per second (Mbps) and upload speeds of at least 3 Mbps — or who cannot afford the most expensive broadband access in the world, I have an urgent problem on my hands. My child may be attending school online in a Taco Bell parking lot or huddled under a blanket outside a closed school to piggyback on its wi-fi system, because those places happen to have the nearest internet connection.

My telehealth visits with my doctor are likely interrupted because of a spotty internet signal. My employment is in jeopardy because I must log onto a jittery Zoom connection that’s unreliable at best. For many consumers, the usual go-to places for getting on the internet — community centers, schools, libraries — are closed.

The pandemic has brought several challenges to the fore regarding the “speed of the broadband”. While they ensured the consumers about the Netflix streaming in HD, there was no clamour about the Telehealth and “zoom meetings”. While the above quote may sound alarmist, I think it should be time to re-think the idea about net neutrality.

This is to prioritise the packages laden with the video calling from specific IP addresses to get a higher priority and no packet drops or from newer co-locations to serve the communities better. The author paints a very sorry picture about the state of affairs in a developed economy but there are the local rules that come in the way for effective roll out of fibre. Most companies wouldn’t invest money in a venture which is financially unviable.

It is easier to state the problem, but different subsidies have to be rolled out accordingly. The solutions are usually unpalatable to someone picking up the tab. Hence, the contentious rule books get shorted between different stakeholders for practical purposes. The way out is to define the policy that’s good for the consumers and not the commercial enterprises based on their strength of lobbying.

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