The New Digital Divide

Susan Crawford in the New York Times on The New Digital Divide:

“While we still talk about “the” Internet, we increasingly have two separate access marketplaces: high-speed wired and second-class wireless. High-speed access is a superhighway for those who can afford it, while racial minorities and poorer and rural Americans must make do with a bike path…
“Over the last 10 years, we have deregulated high-speed Internet access in the hope that competition among providers would protect consumers. The result? We now have neither a functioning competitive market for high-speed wired Internet access nor government oversight.”

The market for dial-up internet access was competitive. The market for broadband access isn’t. And without competition, incumbents can simply charge a prevailing rate. There’s no incentive for competition, because it’s not like a homeowner can simply switch from Time Warner to Comcast without moving to a new house that is in a Comcast service area. Competition spurs innovation and reduces rent-taking. A market needs either tight regulation or stiff competition. Home broadband providers are shielded form both.